Quick move lower in US dollar reversed after CPI
The US dollar fell by as much as 40 pips in a quick move after CPI but it stormed right back to hit session highs on a few crosses, including against the euro, yen and pound sterling.
USDJPY quickly bouncing back
There isn't anything deep down in the report that will scream to the Fed to ignore the otherwise soft report. Avg weekly earnings were higher but that's bouncing back from a sharp drop the month prior.
Ultimately, you can't argue with price action. I don't see any reason to buy US dollar in the report but that just says there was underlying demand for USD. The dollar rallied in US trading on Monday and Tuesday and it looks like patient buyers are picking up dips.
Secondly, the Fed minutes are due out at 2 pm ET (1800 GMT) and the market could be positioning for a hawkish hike.
