Inflation data did not surprise markets but remained at very high levels (5.4% YoY) and unchanged from June. Core inflation, which excludes energy and food rose by 0.3% from the previous month and thus came in slightly lower than expectations (+ 0.4%).
We saw the USD weaken in the short term as apparently some investors expected even higher inflation. However, with inflation data remaining at June levels - where the highest inflation in 13 years was recorded - I don't see the pressure on the Fed to curb its massive stimulus measures lower now, which should keep support for the USD alive.
We saw the USD weaken in the short term as apparently some investors expected even higher inflation. However, with inflation data remaining at June levels - where the highest inflation in 13 years was recorded - I don't see the pressure on the Fed to curb its massive stimulus measures lower now, which should keep support for the USD alive.