but is facing exhaustion signals amid a risk-on market mood. A failure to sustain above 0.9600 will drag the greenback bulls towards the previous week’s low of around 0.9560. is impacting the mighty US dollar index . As per the market forecasts, US inflation is seen lower at 8.1% vs. 8.5% recorded for July on an annual basis. A decent drop in headline CPI led by falling gasoline prices and soaring interest rates by the Federal Reserve is sufficient to activate bears in the DXY counter.
Investors should be aware of the fact that declining oil infused-inflation will not trim the odds of a third consecutive 75 basis point rate hike by the Fed. Price pressures are still beyond the desired rate of 2% and it will take a hell of sweat to fix the inflation monster. The core CPI that excludes oil and food prices will improve by 10 basis points to 6%.
Fed Governor Christopher Waller said on Friday that it was too soon to say whether inflation was moving meaningfully and persistently downward, as reported by Reuters. Fed policymaker added further that the tight labor market has faded signs of recession ahead and the extent of the rate hike will be more data-driven.is significantly higher than the decline in the mighty US dollar index in a broader context.