US Dollar rises after hotter-than-expected US CPI as energy prices surge
The US dollar is moving higher after US CPI came in above expectations. Stocks are lower and yields are higher on the release. The source does not report specific exchange rates, pip moves or price levels, even though its headline refers to key levels for the dollar. Energy is the main source of the upside surprise. Gasoline prices jumped 9.1% in September, following a 3.9% rise in August. Fuel oil rose 15.3% in September, after a 10.1% gain in August. The two consecutive months of strong energy gains show that fuel costs are adding to headline inflation pressure. For traders, the combination of firmer inflation, rising yields and a stronger dollar points to support for the USD in the immediate reaction to the data. Energy prices are the key component to monitor in the inflation picture.
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