Stronger than expected inflation has once again revamped the dollar.
Dollar index which was down more than 0.5% at one point is up more than 0.65% for the day in post inflation rally. During European hours Dollar index was trading below 95 level and after the CPI release from US testing the 96 mark to pose breakout over the key resistance. Comeback of dollar shows a breakout is very much likely.
US core CPI did the trick for Dollar.
- Headline CPI grew by 0.1% m/m and down -0.2% from a year ago but core CPI that excludes volatile components like energy and foods rose by 0.3% m/m in April and is up 1.8% from year ago.
Dollar index, which has broken month long down trend this week, likely to move higher. Currently trading at 96.05, up 0.7% today and more than 1% since CPI release.
Focus now turns on speech by Federal Reserve Governor Janet Yellen, scheduled at 17:30 GMT.
The material has been provided by InstaForex Company – www.instaforex.com