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The consumer price index rose by 0.4%, and Core CPI by 0.1%. CPI was expected to rise by 0.4%. Core CPI held expectations for a rise of 0.2%.

The dollar retreats after the figures were published. EUR/USD is around 1.3120, and USD/JPY is falling towards the 83.50 line.

In the last FOMC Statement, more emphasis was given to rising prices. Oil prices are high, and this is weighing on the US consumer. The Fed is more focused on Core CPI though.

On a yearly basis, inflation stands at 2.9%. Core inflation is at 2.2%, a bit above the Fed’s new target of 2%, but not too far away.

All in all, it seems that price rises are better seen in oil prices rather than other products. “Second round effects” aren’t seen, not yet. Deflation isn’t a threat anyway, so QE3 isn’t getting closer either.

The current status quo is likely to remain.

US Industrial production and  Capacity Utilization Rate will be published soon, at 13:15 GMT.

The University of  Michigan’s consumer sentiment is due for 13:55 GMT. See how to trade this event with EUR/USD.