TheNews

Trading the News: U.S. Consumer Price Index (CPI)

The U.S. Consumer Price Index (CPI) may undermine the recent rebound in EUR/USD as the headline reading is expected to hold steady at 1.6% in February.



What's more is that the core rate of inflation is projected to print 2.2% for the fourth consecutive month, and signs of sticky price growth may spark a bullish reaction in the U.S. dollar as it put pressure on the Federal Reserve to bring back the hawkish forward-guidance for monetary policy.



Updates to the U.S. Consumer Price Index (CPI) showed the headline reading narrowing to 1.6% from 1.9% per annum in December, while the core rate of inflation unexpectedly held steady at 2.2% for the third consecutive month in January. A deeper look at the report showed the stickiness was led by a 1.1% in the cost for apparel, with prices for food increasing 0.2% during the same period, while transportation costs fell 1.3% on the back of lower energy prices.

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