Warm CPI VS US Politics
|GBPUSD, M30
U.S. CPI rose 0.2% in February for both the headline and core rates. There were no revisions to January gains of 0.5% and 0.3%, respectively. The 12-month pace accelerated to 2.2% y/y (the fastest since last March) from 2.1% y/y previously for the headline, but was flat at 1.8% y/y for the ex-food and energy component. Energy costs were up 0.1% last month versus 3.0% in January, with transportation unchanged after the 1.8% gain previously. Apparel prices remained firm, up another 1.5% after surging 1.7%. Housing costs increased 0.3% versus 0.2%, with owners’ equivalent rent up 0.2% versus the prior 0.3%. Food/beverage prices were unchanged. Medical care costs dipped 0.1%. Personal computer prices dropped 1.2%. The data aren’t surprising and it is expected that shouldn’t be problematic for the FOMC, leaving the gradual tightening approach in place.
The dollar slipped following the CPI data, which came in at consensus expectations. The biggest moves were seen at USDJPY which dipped to 106.70, and at GBPUSD which rallied 60 pips up to 1.3961 . The EURUSD rallied to 1.2384 from 1.2340. Equity futures added to prior gains, while yields eased.
However these sharp moves is seems that have been mainly affected by US politics and the news that U.S. Secretary of State Tillerson will be replaced by CIA Director Pompeo. According to President Trump’s Tweet: “Mike Pompeo, Director of the CIA, will become our new Secretary of State. He will do a fantastic job! Thank you to Rex Tillerson for his service! Gina Haspel will become the new Director of the CIA, and the first woman so chosen. Congratulations to all!”
There's more! Access all our latest analyses and other great content by subscribing to the HotForex Youtube channel. You can also talk to our experts live by registering for one of our free webinars!
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.