USD Weakens on Disappointing Inflation Data; GBP Shows Recovery from Brexit Woes
Published October 13, 2017
The US dollar moved near two-week lows this morning, following a release of weaker than expected data on US inflation. This dampens prospects for the US economy while creating uncertainty over the potential US interest rate hike in December.
US Consumer Inflation showed a reading of 0.5% versus expectations of 0.6%; the core iteration of this data (consumer prices not including food and energy) came in at 0.1% versus expectations of 0.2%.
US month-on-month retail sales fell with a reading of 1.6% versus growth expectations of 1.7%; the core version (excluding automobile and gas sales) grew with a 0.5% reading against expectations of 0.4%.
The Great British Pound rose to a 2-week high today, erasing sharp losses, after a German newspaper reported that the UK could stay in the European Union for another two years; GBP fell earlier this week after EU chief negotiator Michel Barnier announced that Brexit talks were at an “impasse”.
The UK has yet to indicate how much the country would be willing to pay the European Union in exit fees; for now, reports suggest that the European Union’s offer is tied to the UK meeting all of its obligations as an EU member, however, without any of the voting rights.
Oil prices moved higher this morning after news of a third consecutive week of declines in US crude stockpiles showed new signs that the oil market is re-balancing. A monthly report from OPEC also indicated the global oil demand will rise around by 30,000 barrels a day for this year and 2018.