USD falls after inflation report
Wednesday 12 January, 2022
Daily Currency UpdateDemand for the US dollar fell against a basket of major currencies after data showed that consumer prices rose last month. Annual CPI rose to 7% in December, which was in line with economist expectations. Controlling price pressures is now a key mandate for the Federal Reserve and this robust print makes a stronger case for the central bank to hike interest in March. A strong inflation reading would typically help boost demand for USD, however some analysts attribute today's selloff to the fact that many investors have already priced in sooner-than-expected rate hikes from the Fed. The US Dollar Index was down 0.51% trading at around 95.13 at the time of writing.
Key MoversEURUSD extended its rally in early morning trading, largely helped by USD weakness across the board. The pair was trading at 1.14285 at the time of writing. GBPUSD also climbed as expectations for a potential interest rate hike from the Bank of England increased recently. Despite record COVID-19 cases in the UK, the government has maintained that it would keep the economy open which has been a positive for the pound. GBPUSD was sitting at 1.3697 at the time of writing.
- EUR/USD: 1.1354 - 1.1428 ▲
- GBP/USD: 1.3614 - 1.3697 ▲
- AUD/USD: 0.7195 - 0.7275 ▲
- USD/CAD: 1.2503 - 1.2605 ▼