The much-anticipated CPI data for January came in higher than expected at 7.5% causing the US dollar to surge higher vs. most all currencies. The price of oil increased on the news helping the Canadian dollar and other commodity currencies. The Japanese yen trades over 116 which is the weakest in five years.
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February 10, 2022
EUR/USD 1.1395 GBP/USD 1.3541 USD/CAD 1.2694 AUD/USD 0.7177 USD/JPY 116.26 USD/CNH 6.3606 USD/ILS 3.2287 USD/MXN 20.4491 USD/CHF 0.9285 USD/INR 74.9475 USD/BRL 5.2194 USD/SGD 1.3441 USD/DKK 6.5195 USD/SEK 9.2537 USD/NOK 8.8344
Consumer Price Index for January came in at 7.5% YoY vs. the forecast of 7.3%. Excluding Food and Energy, the CPI index was 6.0%. The US dollar spiked higher on the news as investors deduce the need for the Federal Reserve to raise interest rates at a faster pace than previously anticipated.GBP
The pound lost ground to the dollar following US inflation data. Bank of England Chief Economist Huw Pill called for a “measured” approach to rate hikes, voicing concerns about taking “unusually large policy steps”. He echoed counterparts from across the pond, confirming that a data-driven approach will most likely be the key driver in decision making.EUR
The euro fell to a 1-week low after the release of inflation data in the US. European Central Bank Governing Council member, Olli Rehn, stressed that changes in monetary policy must be gradual. His comments suggest an initial rate increase at the end of this year or possibly early next year.CAD
The Canadian dollar is weaker vs. the US dollar after the release of CPI data in the US. However, higher oil prices tempered the CAD weakness.ASIA/PACIFIC
The Japanese yen broke above the psychologically important 116 resistance after CPI data release in the US. Bank of Japan Governor Kuroda said that there is “no chance” the central bank will reduce easing or begin tightening policy, as the likelihood of Japan seeing inflationary pressures like other countries are facing is “very low”. The Japanese yen trades at its weakest level since 2016.
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