Higher than expected inflation data boosts USD
Tuesday 13 July, 2021
Daily Currency UpdateUSD - United States DollarDemand for the US dollar jumped this morning after figures showed that inflation climbed higher than expected in June. The US Dollar Index was up 0.38%, trading at 92.61 at the time of writing.According to the The Consumer Price Index (CPI), inflation in the US rose 5.4% from a year earlier, above estimates of 4.9%. Core inflation also rose to 4.5%, above analyst expectations of 4%. This was the biggest monthly gain in consumer prices since August 2008.Demand for the euro and the pound against the dollar tumbled after the release of the CPI numbers.
Key Moversly, the euro has been little changed by European Central Bank headlines. Data releases from the Eurozone are few today so US inflation data may be the main driver for EURUSD’s downward trend. EURUSD was down 0.37%, trading at 1.1818 at the time of writing. With little data from the UK, the pound also extended losses against a surging US dollar. GBPUSD was down 0.40%, trading at 1.3830 at the time of writing. UK Prime Minister Boris Johnson confirmed that the UK would proceed with the removal of restrictions on July 19 despite concerns surrounding a resurgence in COVID-19 Delta variant cases. The reopening is good news for the economy, but investor confidence has also been knocked down by resurging COVID cases, according to some analysts. The Canadian dollar also fell after the release of US inflation figures boosted demand for the US dollar. USDCAD was up 0.66%, trading at 1.2531 at the time of writing. A growing COVID-19 outbreak in Sydney and a slow national vaccination rate have pushed Australia’s recovery nearer the end of the year and into 2022 according to some analysts. AUDUSD was down 0.26%, trading at 0.7460 at the time of writing.
- EUR/USD: 1.1792 - 1.1874 ▼
- GBP/USD: 1.3804 - 1.3905 ▼
- AUD/USD: 0.743 - 0.7501 ▼
- USD/CAD: 1.2443 - 1.2538 ▲