US Dollar: Hot CPI keeps Fed cautious – Danske Bank

FXStreet Insights Team FXStreet

Danske Research Team highlights that United States (US) Consumer Price Index (CPI) data showed strong core and services inflation, reinforcing concerns about persistent underlying price pressures. Shelter and super-core components rose, while core goods remained flat. They note markets will watch upcoming PPI data to see if it confirms similar momentum and keeps the Federal Reserve (Fed) cautious.

Services and shelter drive CPI higher

"In the US, April PPI data is due for release. Yesterday's CPI print showed sticky monthly services and super-core inflation, reinforcing concerns around persistent underlying price pressures. Markets will watch whether PPI confirms similar price momentum."

"Headline inflation rose 0.6% m/m SA, in line with expectations, while core inflation was stronger than expected at 0.4% m/m SA (cons 0.3% m/m). Shelter rose 0.6% m/m and "super-core" (core services ex shelter) picked up to around 0.45% m/m, the highest in three months, underlining that domestic service price pressures remain uncomfortably firm. "

"By contrast, core goods inflation was flat at 0.0% m/m, suggesting limited pass-through so far from higher commodity prices and keeping underlying pressures largely concentrated in services, reinforcing a cautious Fed."

"In US monetary policy space, the Senate confirmed Kevin Warsh to a 14-year term as Federal Reserve governor by a 51-45 vote and is expected to vote as soon as today on a concurrent four-year term as Fed chair, positioning him to succeed Jerome Powell."

"Although Powell's term as chair formally ends on Friday, he stated last month that he will remain on the Fed board as a governor."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD trims gains, hovers around 1.3520 on US CPI data

GBP/USD adds to the weekly move higher and keeps the trade above the 1.3500 threshold on Wednesday. Cable’s extra recovery follows the modest selling pressure on the Greenback after US CPI readings matched consensus in July.

EUR/USD retargets 1.1550 on US inflation

EUR/USD picks up some traction and flirts with the 1.1550 region on Wednesday. The pair’s modest advance comes as the US Dollar gathers some steam after US CPI data matched estimates last month.

Gold clings to gains above $4,400 post-US CPI

Gold reverses the recent weakness and reclaims the area past the $4,400 mark per troy ounce on Wednesday. The precious metal’s recovery picks up pace and exceedes the $4,400 level in the wake of the release of in-line US inflation figures in July and the marginal gains in the US Dollar.

Ripple lags recovery as exchange reserves expand

Ripple is trading within a broadly constrained technical structure, with support at $1.00 and key moving averages limiting its recovery potential. In August, the remittance token declined by approximately 6.5%, extending its total pullback to around 14% from July's $1.18 peak.

911 million shares freed: Why SpaceX rallied into its own supply

The most heavily trailed supply event of the year landed on August 6, and the SpaceX (SPCX) stock went up. Roughly 911.5 million shares held by insiders and early backers became eligible to trade, around 43% more than the entire float sold at the listing.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.