Higher CPI and better initial jobless claims lift US dollar
Just when the wheels were coming off the US dollar bus, a stronger inflation report sparked a reversal.
USD/JPY hit a session low of 118.07 shortly before the data and rallied to 118.61 afterwards.
The pair is flirting with a breakout from the seven-week post-panic range. The low today was the worst level since the momentary spike down to 116.00 on Aug 24.
The dollar is similarly strong across the board, gaining around 50 pips.
The dollar move was aided by initial jobless claims falling to the lowest since 1973 but tempered by a slightly soft Empire Fed.
Overall, this should continue to lift the US dollar for the next few hours as Fed hike talk returns.
Update: EUR/USD is now extending losses, down to 1.1370.