The US dollar and interest rates both eased back following the release of March CPI data. The headline inflation data may not have been as high as some had expected causing Treasury rates to slip and FX traders to take profits on long-dollar bets. The price of oil rebounded on news Shanghai will ease some COVID restrictions. The Israeli central bank surprised markets with a larger than expected rate increase to 0.35% causing the shekel to gain.
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EUR/USD 1.0873 GBP/USD 1.3042 USD/CAD 1.2614 AUD/USD 0.7469 USD/JPY 125.09 USD/CNH 6.3680 USD/ILS 3.2093 USD/MXN 19.8288 USD/CHF 0.9296 USD/INR 76.1837 USD/BRL 4.6382 USD/SGD 1.3625 USD/DKK 6.8378 USD/SEK 9.4834 USD/NOK 8.7531
US CPI for March came in at 8.5% which was slightly ahead of the 8.4% forecast, but below some whisper numbers. The Core CPI figure was 6.5% which was slightly less than the forecast of 6.6%. Overnight, the 10-year treasury yield rose above 2.8%, the highest level since December 2018, as all signs continue to point to expectations of the fastest monetary tightening since the early nineties.GBP
The pound gained on the US dollar following the CPI reading, but remains near 1.30-1.31 lows. UK living standards fell at the quickest pace in over eight years, as wage growth trailed behind inflation in February. Despite unemployment falling to the lowest level since the end of 2019, the soaring cost of living is overshadowing the UK's strong labor market.EUR
EUR/USD shot higher on overall dollar weakness. European natural gas prices rallied, following a week of declines, as Russian supplies through Ukraine are expected to drop. The euro continues to trade near 1-year lows relative to the US dollar on concerns the eurozone economy will be more severely impacted by the Russian/Ukraine war.CAD
The Canadian dollar gained versus the greenback after the CPI print. Strength in the loonie was also supported by a rebound in oil. The price of oil jumped 4% on news Shanghai eased some lockdown restrictions and rumors that OPEC has told the European Union it will not be possible to replace potential Russian supply loss.ASIA/PACIFIC
The Australian dollar gained on the greenback after four days of losses as the price of oil rose and US Core CPI was not as high as expected.
The yen rebounded against the dollar after today’s US CPI data. Japanese Finance Minister Suzuki has heightened warnings over the depreciation of the yen, confirming the government will be monitoring the situation closely.
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