The “greenback” recovered losses. Overview for 13.05.2021

EURUSD plunged on Thursday; the “greenback” managed to recover some of its losses. 

The major currency pair plummeted after the USA reported on inflation. The current quote for the instrument is 1.2068.

Just as expected, the American statistics on inflation were extremely important. The Consumer Price Index showed 0.8% m/m in April against the expected reading of 0.2% m/m. On YoY, the indicator skyrocketed up to 4.2% and that’s the highest reading since 2008. The Core CPI showed 0.9% m/m against the expected reading of 0.3% m/m.

This price surge has a quite logical reason: as the American economy is re-opening after the coronavirus pandemic and global social restrictions, consumers face limited supply, which pushes prices upwards. 

At the same time, the United States Department of Labor believes that the price surge is temporary and one report shouldn’t be considered as a tendency. Of course, it’s true but market players got exactly what they wanted. 

The drama happened just the way it was expected to: now the pressure on the US Federal Reserve System to revise its monetary policy ahead of the schedule will surely increase. It might be interesting to hear any response from the regulator, which keeps talking about patience. 

Now investors are switching their focus on the Retail Sales and Industrial Production reports for April from the USA to be published on Friday. The indicators are expected to add 1.0% m/m and 1.2% m/m after expanding by 9.8% m/m and 1.4% m/m in March respectively.