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US CPI rose by 0.1%, in August, below expectations to rise 0.2% in August. Core CPI saw more modest expectations of +0.1%. The Fed sees inflation as subdued, but does not really fear disinflation at this point. The annual level of inflation is 1.5%. A gain of 1.6% was expected.

The dollar is weaker after the publication: EUR/USD traded around 1.3360 and is ticking up towards 1.3370. USD/JPY was around 99.15 and now trades a few pips lower.

Later today, the US will release the  TIC Long-Term Purchases and the NAHB Housing Market Index. The former has been showing outflows from the US.

The Fed begins its meeting today – a meeting that is expected to end in announcement to taper bond buys (QE). The announcement will be made tomorrow at 18:00 GMT.

See:  QE Tapering Preview: 5 Reasons, 6 Scenarios and 7 Potential Currency Reactions