(MENAFN- DailyFX)
US DOLLAR OUTLOOK: USD PRICE ACTION RIPPING HIGHER AS INFLATION HITS 4.2%
- bulls send the broader DXY Index sharply higher following red-hot inflation data
- price action plunges 50-pips as spikes 35-pips in immediate response
- Federal Reserve taper talks could intensify amid evidence of price pressures rising quickly
Markets are reacting to the latest round of CPI inflation data. US Dollar volatility is accelerating as the DXY Index pushes sharply higher following hotter-than-expected inflation. Headline and core inflation crossed the wires at 4.2% and 3.0%, respectively. This topped the market forecast looking for cooler prints of 3.6% and 2.3%. The notably higher readings of inflation are helping the US Dollar strengthen as the data could complicate the dovish Fed narrative and bring forward the timeline for taper talks.
DXY – US DOLLAR INDEX PRICE CHART: ONE-HOUR TIME FRAME (07 MAY TO 12 MAY 2021)
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The broader DXY Index now trades nearly 0.5% higher on the session thanks to the influx of US Dollar demand. / dropped nearly 50-pips while USD/ jumped 35-pips in immediate response to the inflation data. EUR/USD and USD/JPY are the two largest components of the DXY Index with weightings of 57.6% and 13.6% respectively.
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