Slightly higher core CPI enough to send the dollar a half-cent higher.
A 1.8% y/y rise in core CPI compared to 1.7% is little more than a rounding error and it's normally thin gruel for trading but the US dollar has been beaten down this week and the market was looking for an excuse to buy.
A half-cent dollar rally on those kinds of numbers is a rare occurrence and it tells me two things:
- Dollar shorts aren't taking anything for granted and are quick to take profits
- Dollar bulls are out there, lurking, waiting and gobbling up dollars whenever they see an opportunity
USD/JPY is up to 119.20 from 118.70 before the data. There isn't much resistance until 119.40 but I think the next step is data. U Mich numbers are due at 10 am ET and in this market, you need to go where the numbers lead you.
