USD: US July CPI Missed A Bit; Overall USD Negative – CIBC

US data is back to hurting the US dollar. For EUR/USD, the correction seems to be over[1]. What’s next?

Here is their view, courtesy of eFXnews:

CIBC Research comments on today’s US July CPI data Inflation data noticing that it missed a bit to the low side of consensus, with 0.1% gains in both headline and core prices seasonally adjusted.

“That took the 12 month headline rate up a tick to 1.7%, but left core inflation unchanged (matching consensus) at 1.7%. Lately, core PCE hasn’t been tracking as much below core CPI as it had earlier, so we’re not necessarily miles below the 2% core PCE objective. But we’re going to need a few 0.2% monthly gains in core prices to stay on track for our projected Fed hike in December.

The soft monthly numbers (helped by a drop in autos) should be supportive for fixed income and negative for the US$,” CIBC adds.

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