More inflation disappointment drove the dollar lower this afternoon, as investors process what the latest data means for this evening’s Federal Reserve statement.
Though the headline number arrived as expected at 0.4%, the core CPI figure missed estimates, coming in at just 0.1% against the 0.2% forecast. This meant that year-on-year core reading rose by a Fed target-missing 1.7% – not enough to prevent the central bank from announcing its long-signalled interest rate rise, but perhaps the kind of news that will push a few more Fed members to the dovish end of the spectrum when considering the pace of any further hikes in 2018.
Of course the dollar was bitterly disappointed by such a reading. The greenback shed 0.2% against the euro, and 0.4% against both the pound and the yen; this only gave more fuel to the Dow Jones, which jumped 0.3% after the bell to hit its umpteenth 2017 all-time high, leaving the index a few points shy of 24600.
Despite a largely downbeat reaction to the latest jobs report from analysts, sterling has continued to climb higher this Wednesday, pairing its gains against the dollar with a 0.3% rise against the euro. This effectively erased the FTSE’s meagre growth, with the index also not helped by BP (LON:BP) and Shell (LON:RDSa) giving back some of yesterday’s gains; still, the UK index has managed to hold itself above 7500, and remains at a one month peak.
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