US: Core inflation as expected – Nordea Markets

Sandeep Kanihama FXStreet Contributor

US core CPI came out at 0.2% m/m in May, unchanged from April and in line with consensus expectations and consequently, core CPI inflation rose to 2.2% y/y from 2.1% y/y in April, notes Kjetil Olsen, Research Analyst at Nordea Markets.

Key Quotes

“Headline CPI also increased 0.2% m/m in May and 2.8% y/y. Higher energy prices are the reason for the high headline inflation.”

“The main driver for the increase in core inflation is core service inflation, reflecting higher wage pressures.”

“Momentum remains close to 2% but there are upside risks ahead. We expect core inflation to reach 2.5% during summer and rise very gradually during the remainder of the year in tandem with a further rise in wage growth due to the strong labour market.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD turns negative near 1.1850

EUR/USD has given up its earlier intraday gains on Thursday and is now struggling to hold above the 1.1850 area. The US Dollar is finding renewed support from a pick-up in risk aversion, while fresh market chatter suggesting Russia could be considering a return to the US Dollar system is also lending the Greenback an extra boost.

GBP/USD change course, nears 1.3600

GBP/USD gives away its daily gains and recedes toward the low-1.3600s on Thursday. Indeed, Cable now struggles to regain some upside traction on the back of the sudden bout of buying interest in the Greenback. In the meantime, investors continue to assess a string of underwhelming UK data releases released earlier in the day.