US data release for CPI and CPI except food and energy came out pretty much as expected. 0.2% and 1.8% respectively on a yearly basis. The USD first reacted negatively, with the greenback tacking a dive against most other major currencies. That was corrected within the first 15 minutes as the USD started trading higher to most currencies. My reading of this, initial reaction was that inflation is only slightly on the rise and in line with expectations and therefore an interest rate hike doesn’t seem so likely in the short term, meaning for September. Then the idea that the overall CPI is low 0.2% but if you exclude energy and food it’s 1.8% Energy probably being the main reason for inflation data being so low as crude oil keeps getting pushed lower by a strong US Dollar and over supply. Leading to the conclusion a rise in Crude Oil will also fuel higher inflation. Later we have the FOMC minutes release this may offer more clues as to when the rate hike will happen. It remains clear to me that the USD is in a major bull trend with a strong economy especially compared to Europe, that any retracement to higher levels is simply a good chance to sell.

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