FOREX: US Dollar Rises Ahead of Consumer Price Data
The US dollar rose against its major trading partners early Wednesday, except for a decline versus the euro, before the release of consumer price data for July, the first major release since the Aug. 2 employment report that raised hopes of an interest rate reduction in September.
Analysts expect 0.2% gains in both overall consumer prices and core prices, holding the year-over-year rates roughly steady compared with the previous month.
Global risk sentiment got a lift from a soft US producer inflation print yesterday, as the final demand index came in at 0.1% month-on-month (consensus 0.2%) and the measure excluding food and energy was flat in July (consensus 0.2%).
Back to today’s July CPI report, ING analyst Francesco Pesole said expectations are for 0.2% month on month in both core and headline inflation. That would mark a re-acceleration from June’s 0.1%, but not enough to cause the Fed concern.
Analyst sees the uptick in EUR/USD into the upper half of the 1.09-1.10 range as the start of a longer-lasting upward trend.
A quick summary of foreign exchange activity heading into Wednesday showed that USDEUR rose to 1.1023 from 1.0996 at Tuesday US close and 1.0925 at the same time Tuesday morning.
Eurozone GDP and employment both grew as expected in Q2 while industrial production fell in June, data released earlier Wednesday showed. The next European Central Bank meeting is scheduled for Sept. 12.
GBPUSD fell to 1.2843 from 1.2867 at the Tuesday US close but was above a level of 1.2789 at the same time Tuesday morning.
UK consumer prices declined in July while core prices were up only slightly, according to data released overnight. The next Bank of England meeting is scheduled for Sept. 19.
USDJPY rose to 146.9440 from 146.8474 at the Tuesday US close but was below a level of 147.4416 at the same time Tuesday morning.
Japanese business conditions remained positive in August with only a slight decline in the index, data released overnight showed. The next Bank of Japan meeting is scheduled for Sept. 19-20.
USDCAD rose slightly to 1.3712 from 1.3709 at Tuesday. close but was down from a level of 1.3736 at the same time Tuesday morning. Canadian consumer sentiment data for August is scheduled to be released at 11:00 am ET. The next Bank of Canada meeting is scheduled for Sept. 4. #FOREX: US Dollar Rises Ahead of Consumer Price Data
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