Monex: CPI is in line with expectations, but key figures lag behind and USD falls

Monex: CPI is in line with expectations, but key figures lag behind and USD falls

11 augustus 2021

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This is a commentary by Ima Sammani, FX Market Analyst at Monex Europe, on the expected CPI.

The US dollar rose along with Treasury yields ahead of today’s crucial CPI release as the robust Nonfarms figure from July paved the way for expectations that the Fed may have to take its foot off the gas sooner rather than later. When the headline landed bang on expectations while the core figure printed just below, the disappointment in markets translated to a moderately weaker dollar across the board to Monday’s highs, while price action in yields was more limited. 
 
Given today’s muted reaction, this arguably wasn’t the banger markets had hoped for that would help FX markets break out of their current serenity, especially after two Fed members stated at the start of the week the central bank may be ready to signal a QE taper in Q4. Looking ahead, the focus is back on the remaining Fed speeches in the coming two weeks before Jackson Hole may give markets more to chew on. 
 
US yields remain in weekly range after dull CPI print
1108 Monex

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