Aug 14 2008
US CPI On Tap
The USD completed yesterday’s trading session with mixed results versus its major rival currencies. During the first half of the day, the U.S. dollar eased versus the euro and the yen after government reports showed that Retail Sales fell 0.1% in July, below the 0.5% expected by analysts. The greenback retreated from earlier gains after concerns over gasoline supply following a U.S. inventory report showed that crude stockpiles and refined product supplies fell last week, declining to its lowest levels since last 10 years.
Following this report, the Crude Oil prices rocketed more than $4 per barrel hurting the USD against the EUR and increasing worries about the main economy’s growth outlook. However, the USD rebounded in the late trade session and the recovery erased earlier losses and the USD edged lower against the Euro and rose against the Yen. Also yesterday, Import Prices from the U.S. rose 1.00% more than expected, reaching 1.7%. This increase was preceded by sharp gains in energy and food prices leading prices for imported goods to their fastest annual gain on record.
Today will be another big news day for the greenback. The Core CPI is forecasted to decrease by 0.1% from 0.3% in the last month and the CPI is expected to be reduced to 0.4%, which shows that inflation is easing on the U.S. economy. The Unemployment Claims report, one of the most influential USD indicators, is forecasted by analysts to show a decrease of 15k jobless individuals, from 455K last week. Also today, the President of the FED Bank of Minneapolis will deliver a speech about Repercussions from the Financial Shock where we will find out if the FED will maintain its hawkish inflationary rhetoric. Traders should follow the Unemployment Claims report and CPI results which will determinate USD trends.
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