Dollar Brushes Aside CPI Data, Continues Ranging

The multi-decade high in US CPI data does not seem to be causing any movement in the Dollar. In general, the greenback is trading in a narrow range.

The US CPI rose to 6.8%, the highest annual rate since 1982, according to data released on Friday ahead of the FOMC meeting next week. According to analysts, pressures are still widespread, with supply systems straining to fulfill soaring demand for products and services inflation only now beginning to reflect the pandemic’s implications on housing costs. They expect the monthly trend in price increases to moderate in the coming months, but note that there is a significant gap between current inflation and the Fed’s target.

The consumer price index in the United States in November rose by 0.8% mom, which is higher than expected by 0.7% mom. Over the 12 months, the consumer price index accelerated to 6.8% YoY, compared to 6, 2% YoY, in line with expectations. This is the highest rate since June 1982.

The core CPI rose 0.5% MoM, in line with expectations. The core CPI rose to 4.9% YoY from 4.6% YoY, in line with expectations. The Energy Index is up 33.3% YoY. Both are the highest in at least 13 years.

After CPI Data, US Dollar Index Ended the Week at 96.00

As the Wall Street session came to a close, market sentiment was positive, with major US equities finishing in the green, with gains ranging from 0.60 percent to 1.13 percent.

Treasury rates in the short maturity of the curve declined by 1-3 basis points, ending at 0.6544 percent, 1.2467 percent, and 1.482 percent, respectively, in the US bond market. The long-term 20s and 30s of the curve rose 1-1.5 basis points, respectively, to 1.9138 percent and 1.88 percent.

Aside from that, the US dollar was at the mercy of US inflation data. The Department of Labor announced on Friday that the Consumer Price Index for November grew to 6.8% on an annual basis, in line with expectations and higher than October’s reading of 6.2 percent. In addition, the Core CPI, which excludes food and energy, increased to 4.9 percent, as expected but higher than October’s 4.6 percent.