Up Next US Inflation – Where Will It Take the Buck?

Posted Tuesday, October 18, 2016 by
Skerdian Meta • 1 min read

Had enough of inflation numbers yet? Well, there´s more to come. After the positive UK inflation report this morning, the US inflation figures will take the spotlight next. Just in case you missed it, the UK house prices, the CPI and core CPI jumped higher this month but the Pound couldn´t. 

Anyway, the US CPI (consumer price index) numbers are due in a while. Unlike the UK inflation report, in the US the CPI and PPI (producer price index) are released separately. So, what can the PI data do to the Buck today? 

In my opinion, I don´t think there´s much room for excitement. The decision has been taken for the December interest rate by the FED. Unless the numbers are really horrible, which I don´t expect, the Buck is going to get a slight lift, particularly if the numbers beat the expectations. Expectations are that the trend remains the same as last month, but the higher oil prices might spice thing a bit. 

In case the numbers are negative, the market will likely brush them off under the carpet because they won´t affect the FED´s rate decision, not just one bad report anyway. If the numbers are around the expected levels then as I said I expect a slight bid in the USD since it will relax some nerves in the market. If the numbers are really positive like in the UK this morning, then the market might get the idea that the FED will step up their monetary tightening process and the buck will shoot higher, unlike the GBP in this case. 

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