Euro steadies against US Dollar after volatile reaction to US CPI
- The Euro recovers against the US Dollar following a brief decline after the US CPI release.
- Headline inflation meets expectations, but the monthly core reading comes in hotter than forecast.
- Gasoline prices account for more than one-third of the monthly increase in headline CPI.
EUR/USD reverses earlier losses on Friday after the latest United States (US) Consumer Price Index (CPI) report came broadly in line with expectations and failed to trigger a strong market reaction. Still, the data showed that inflation remains sticky, reinforcing expectations that the Federal Reserve (Fed) could raise interest rates next week. At the time of writing, EUR/USD trades around 1.1600 after touching an intraday low of 1.1569.
The headline CPI rose 0.4% MoM in August, matching market expectations but accelerating from the 0.1% increase recorded in July. Annual inflation held steady at 3.4%, also in line with forecasts.
Core CPI, which excludes volatile food and energy prices, increased 0.3% MoM, above the 0.2% forecast and the previous reading of 0.2%. Annual core inflation eased to 2.4% from 2.5%, matching market expectations. The report also showed that gasoline prices rose 3.9% in August and accounted for more than one-third of the monthly increase in headline inflation.
The US Dollar attracts limited buying interest following the release. The US Dollar Index (DXY), which tracks the Greenback limited buying interest following the release. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 99 after briefly climbing to 99.36 in the immediate reaction to the data. A pullback in US Treasury yields from multi-year highs also limits the Greenback’s advance.
The CPI figures follow Thursday’s Producer Price Index (PPI) report, which showed that annual producer inflation accelerated to 5.4% in August from 4.8% in July. The latest data strengthened expectations of a rate hike at the Fed’s September 15-16 meeting. According to the CME FedWatch Tool, markets now price in an 88% probability of a 25-basis-point increase, up from 67% earlier in the day.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.08% | -0.10% | -0.67% | 0.23% | -0.38% | -0.48% | 0.17% | |
| EUR | -0.08% | -0.17% | -0.73% | 0.16% | -0.45% | -0.62% | 0.09% | |
| GBP | 0.10% | 0.17% | -0.56% | 0.34% | -0.28% | -0.41% | 0.27% | |
| JPY | 0.67% | 0.73% | 0.56% | 0.92% | 0.31% | 0.16% | 0.86% | |
| CAD | -0.23% | -0.16% | -0.34% | -0.92% | -0.61% | -0.76% | -0.06% | |
| AUD | 0.38% | 0.45% | 0.28% | -0.31% | 0.61% | -0.14% | 0.54% | |
| NZD | 0.48% | 0.62% | 0.41% | -0.16% | 0.76% | 0.14% | 0.70% | |
| CHF | -0.17% | -0.09% | -0.27% | -0.86% | 0.06% | -0.54% | -0.70% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).