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Dollar Extending Gains on Strong CPI

The US dollar extends it’s gains after the CPI and Core CPI were slightly better than expected. The strongest impact is in the Japanese Yen.

Core Consumer Price Index (CPI) rose by 0.2%, and CPI was at 0.3%. Both figures were 0.1% more than early expectations.  

After taking a break yesterday, the US dollar renewed it’s strength in the wake of Friday, February 20th. It reached new levels against the Japanese Yen (USD/JPY now at 94.33), and against the Swiss Franc (USD/CHF at 1.1860).

The release of CPI data in the US just pushed it forward. Also the Euro renewed its losses. EUR/USD now at 1.2595.

The British pound was the only major currency that enjoyed some strength. This came after British  Retail Sales were much better than expected: they rose by 0.7%. Early predictions expected them to be unchanged.  Boris Schlossberg of FX360 says that “the UK to  may be bottoming out and could be the first of the G7 nations to stage a rebound.”

After the release of the UK  Retail Sales data, the GBP/USD went as high as 1.4371. But also here, the effect of American CPI data reversed the direction of the pound: GBP/USD is now under 1.43 again, but is still stronger than other majors.

This strengthening continues the “normal” behavior that began yesterday. The dollar is strengthening on strong data. The risk factor stays in background. At least for now…

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.