USD got support. Overview for 15.02.2023
EURUSD started declining again. The current quote is 1.0720.
Yesterday, all eyes were glued to the US inflation report during the trading day. The CPI in January turned out higher than expected again, which let the USD get stronger again.
In January, the CPI dropped to 6.4% y/y from 6.5% y/y a month before. However, the forecast had suggested a decline to 6.2%. Month-wise, the situation worsened noticeably. Inflation increased by 0.5% m/m, as expected. However, in December it was just 0.1% m/m. This contrast is definitely not what we would like to see.
It turns out that regardless of all other conditions, prices in the US in January were growing faster than in any month since October.
Naturally, the market got nervous: if inflation is going wild again, the Federal Reserve System is likely to get down on it with extra force. This means the interest rate will be lifted again, and companies will remain under serious financial load.
The US will go on publishing the statistics today – retail sales and industrial production reports, in particular. Volatility will remain high.
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