US prices rose 6.5% in the 12 months to December. Yesterday’s US CPI data printed as expected, confirming that the world’s largest central bank is seeing continued success in its plight to tame the rampant surge in prices seen since the peak of the pandemic.
The market reaction saw the greenback whipsawed in a 1-cent range against both the pound and euro in the few minutes following the release. After around 30 mins of back-and-forth movement, it was the dollar bears who came out on top with both GBPUSD and EURUSD pushing to fresh highs. The euro jumped above $1.08 while cable pushed through the $1.22 level.
This month’s Fed announcement will be closely watched for any further comments regarding the acknowledgement of the recent improvement in the US inflation outlook.
Have a great weekend.
Written by Viv Savani. 8:06am, January 13th 2023
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