US Inflation

The Euro to Dollar exchange rate rallied in midweek trade after official figures revealed another tick lower in the annual measure of price growth but also a much more importantly meaningful glimpse of victory for the Federal Reserve (Fed) in its effort to contain the inflation demon.

The Pound to Dollar exchange rate pared earlier losses to trade buoyantly near the year's highs ahead of the weekend after the Federal Reserve's (Fed) preferred inflation measure fell further than was expected in the latest update, curbing a corrective rebound by the greenback.

January's Core Personal Consumption Expenditures (PCE) Price Index was potentially an early warning of a nightmare scenario being in the pipeline for policymakers at the Federal Reserve (Fed) but analyst and economist views on the outlook for interest rates and the Dollar inevitably remain far from uniform.

The Pound to Dollar exchange rate tumbled into key support levels on the charts in the final session of the week after the Federal Reserve's (Fed) preferred measure of inflation bounced notably in what might yet transpire to be a January harbinger of a renewed upturn. 

The pending departure of Vice Chair of the Federal Open Market Committee (FOMC) Lael Brainard is one further potentially hawkish development in the outlook for Federal Reserve interest rates that could have supportive implications for the U.S. Dollar in the weeks ahead. 

The Euro to Dollar exchange rate whip-sawed in a volatile response to official figures revealing accelerating price increases for some goods and services that have placed a question mark over how much longer a recently-declared disinflation process can be expected to continue for in the U.S.  

The Pound to Dollar exchange rate was knocked back from near the week's highs ahead of the weekend after U.S. producer prices rose further than was expected for November in what may be a warning of a protracted battle to get inflation back to the 2% target of the Federal Reserve (Fed).

The Pound to Dollar exchange rate remained buoyant near the week's highs after the Federal Reserve's (Fed) preferred measure of inflation underwhelmed expectations and did nothing to persuade the market into bidding afresh for the greenback ahead of next Wednesday's interest rate decision. 

The Pound to Dollar exchange rate remained under pressure ahead of the weekend after a University of Michigan (UoM) survey indicated that U.S. consumers' expectations of inflation moved further in the wrong direction for the Federal Reserve (Fed) this month. 

The Euro did better than many others even as it fell to an October low against the Dollar after official data showed U.S. inflation accelerating further in September, inciting a sharp rally in government bond yields and bringing Federal Reserve (Fed) interest rate policy back into focus for the market. 

The Federal Reserve (Fed) has an expanded array of tools with which it could fix fractures in the financial system should its interest rate policy lead things to break and the mere existence of some of those tools has likely already acted as a stabilising force, according to Governor Christopher Waller. 

The Pound to Dollar rate climbed back above 1.14 to extend a six-day recovery as U.S. exchange rates eased across the board following the release of data suggesting the number of U.S. job vacancies fell sharply in August. 

The Pound rallied as the Dollar slipped from new highs ahead of the weekend and after a University of Michigan (UoM) survey suggested U.S. consumers' expectations of short and medium-term inflation ebbed in September, although that might not be the most important detail of the survey.

The latest data have vanquished hopes that U.S. inflation may be easing and are widely expected to have caused concern at the Federal Reserve barely a week out from September's interest rate decision, leading many analysts and economists to anticipate some of the strongest action yet from the Fed.

The Euro to Dollar rate sustained heavy losses after sharp increases in some U.S. inflation rates took the market by surprise but its earlier recovery from two-decade lows may have been merely delayed, rather than derailed, and in part because of the evolving Federal Reserve (Fed) policy outlook. 

The Dollar fell widely after both official measures of U.S. inflation came in lower than anticipated for July, fuelling market speculation about a possible peak in price pressures and eliciting much commentary about the outlook for the greenback and Federal Reserve (Fed) policy, some of which is included below. 

The Euro to Dollar exchange rate leapfrogged a double-barreled layer of technical resistance on the charts after both official measures of U.S. inflation came in lower than was anticipated by the market for July, leading American bond yields and the Dollar to retreat further from recent highs.

Pound Sterling recovered lost ground from a retreating Dollar in the penultimate session of the week but the latest from the Federal Reserve (Fed) and Bank of England (BoE) suggests the outlook is hinged on the future direction of U.S. inflation and the UK’s currently faltering economy.

The Pound to Dollar rate slumped heavily in the final session of the week with many currencies coming under pressure after official data showed U.S. inflation climbing further during May in defiance of market expectations for it to ease and with possible implications for Federal Reserve (Fed) policy. 

A stack of evidence is piling up that the global economy is heading for a spike in inflation say analysts, as logistical challenges and the rising cost of raw materials converge.