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The US dollar increases after slightly higher inflation numbers and the gloomy economic tone in Europe set by the ECB

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USD - United States Dollar

The US dollar index decreased 0.22 yesterday after a risk setback where North American equity markets weakened (S&P -0.64 percent and Nasdaq -0.48 percent), followed by the threat that the US would impose $11 billion in tariffs on EU imports, as well as the IMF downgrade on global growth to 3.3 percent from 3.5 percent.

There is a different mood in the FX markets today. The consumer price index (CPI) came in at 1.9 percent versus the 1.8 percent read. Also, the CPI ex-food energy or core inflation unexpectedly cooled and came in at 2 percent versus the expected 2.1 percent. The CPI, on a monthly basis, increased 0.4 percent in March after rising 0.2 percent in February. The US dollar got quick buyers that pushed it more than 0.1 percent in seconds. The EUR/USD fell 20 pips to 1.1256 at 8:30 EST, when the inflation numbers were released; however, the EUR/USD is continuing to drop at this moment following Mario Draghi's speech.

Key Movers

This afternoon, the FX market might have some volatility following one of the quietest periods in the FX markets after the Fed releases the minutes from its surprisingly dovish March meeting.

At the time of this writing, the EUR/USD pair is falling 0.22 percent after the President of the European Central Bank, Mario Draghi, warned that a "persistence of uncertainties" continued to affect the economy of the eurozone. A few minutes ago, Draghi said, “…the risks surrounding the Euro area growth outlook remain tilted to the downside, on account of the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets.” The negative mood in the Euro area can't catch a break.

Expected Ranges

USD/CAD: 1.3322 - 1.3376 ▲

EUR/USD: 1.1185 - 1.1252 ▼

GBP/USD: 1.2975 - 1.3115 ▲

AUD/USD: 0.7124 - 0.7175 ▲

NZD/USD: 0.6733 - 0.6775 ▲