US Core Inflation As Expected
The USD had been bid up through North American markets yesterday and again today, and the expectations were that with the US economy roaring away, inflation would follow. We did, however, see the core inflation rate in Jun rising 0.2% as forecast, although the headline rate at 0.1% has missed by a tenth of a percentage point. Not that this is any major hiccup to the broader outlook on the US, though, on the USD, it may prompt recent buyers to take stock of current levels as we try to test above 95.00 for yet another time - the sixth to be exact.
Once again we see the usual suspects leading the way, with USD/JPY still looking to climb higher still as the pair eyes 113.00. Here we see a cluster of resistance into the figure, and the pace of the rise may cause some to think this has gone far enough for now.
USD/CHF has also risen back to levels which put the parity level under pressure again, though resistance here has also been strong and it looks like another battle is set to take place in the North American session ahead. NY names have been avid buyers in recent sessions, though may come up against some resistance as the longer term outlook on the greenback remains bearish for some and these are good levels to start selling.
Looking at the DXY, we have stalled ahead of the 95.00 mark again, though it is early days as yet. EUR/USD may still look to test lower given ECB reassurances of an accommodative stance remaining in place, and this looks to be a potential target for short-term USD bulls from here.