US DOLLAR OUTLOOK: USD PRICE ACTION RIPPING HIGHER AS INFLATION HITS 4.2%
- US Dollar bulls ship the broader DXY Index sharply greater following red-hot inflation knowledge
- EUR/USD worth motion plunges 50-pips as USD/JPY spikes 35-pips in quick response
- Federal Reserve taper talks might intensify amid proof of worth pressures rising rapidly
Markets are reacting to the newest spherical of CPI inflation knowledge. US Greenback volatility is accelerating because the DXY Index pushes sharply greater following hotter-than-expected inflation. Headline and core inflation crossed the wires at 4.2% and three.0%, respectively. This topped the market forecast on the lookout for cooler prints of three.6% and a pair of.3%. The notably greater readings of inflation are serving to the US Greenback strengthen as the info might complicate the dovish Fed narrative and produce ahead the timeline for taper talks.
DXY – US DOLLAR INDEX PRICE CHART: ONE-HOUR TIME FRAME (07 MAY TO 12 MAY 2021)
The broader DXY Index now trades almost 0.5% greater on the session because of the inflow of US Greenback demand. EUR/USD dropped almost 50-pips whereas USD/JPY jumped 35-pips in quick response to the inflation knowledge. EUR/USD and USD/JPY are the 2 largest parts of the DXY Index with weightings of 57.6% and 13.6% respectively.
Join with @RichDvorakFX on Twitter for real-time market perception