The USD fell on Thursday, not helped by the inflation miss yesterday morning. 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 remain at a 49-year low.
Today the US releases its Export Price Index at 8:30 am, this is followed by a speech from the Chicago Fed President Evans at 9:30 am. Michigan Consumer Sentiment and Expectations are printed at 10 am, this is also follow by FOMC member Bostic speech at 12:30 pm. This will round out this week’s economic fundamentals.
Looking ahead the biggest risk event will be next week when the US Treasury Department releases its twice a year report, the report reviews the currency regimes of the US key trading partners. It was thought that Treasury Secretary Steven Mnuchin was going to saddle up along said President Trump and call China a currency manipulator. These findings have been squashed as Bloomberg is reporting this morning that The US Treasury Department will not say China is manipulating its currency. The yuan is approaching the 7 per dollar level and the PBoC does not seem concerned this would be the weakest level the yuan has ever seen. US equity markets are currently implied to open higher.