The USD fell on Thursday, not helped by the inflation miss yesterday afternoon. The US dollar index, which measures the greenback’s strength against a trade weighted basket of currencies, touched a near two-week low of 94.99. The CPI (inflation) numbers were undermined by a slower increase in the cost of rent and falling energy prices, as underlying inflation pressures appeared to cool slightly. The headline number was up 0.1% vs 0.2% and the core was also weaker than expectations at 0.1% vs 0.2%. In a separate report, the number of Americans filing for unemployment benefits unexpectedly rose for the week ending Oct 6th. Claims rose by 7,000 to 214,000 but still remain at a 49-year low.
Meanwhile, the rout in US stocks subsided yesterday and following the 4% decline in equity markets yesterday, markets recovered through the New York session to finish the US session closer to unchanged, at least compared to yesterday, with a report that Trump and Xi will be meeting at the G20 in November, helping matters.
Looking ahead, we have US Consumer Sentiment and Inflation Expectations today, as well as two Fed members speaking.