US dollar crumbles on the first sign of peak inflation

The euro broke out of its three-week range against the US dollar after a soft US inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term report.

July CPI was flat on the month and lower than the +0.2% consensus estimate. Core and year-over-year measures were also lower than anticipated.

The dollar fell right across the board with USD/JPY plunging 200 pips on the day. That wipes out Friday's gain, which came on a strong non-farm payrolls Nonfarm Payrolls Nonfarm Payrolls (NFP) is the single biggest monthly economic news indicator released out of the United States, usually on the first Friday of every month. Reported by the US Bureau of Labor Statistics, the NFP measures the increase or decrease in the number of people employed during the previous month, except for those working in the farming and agriculture industry.The NFP can also be referred to as an Employment Change, and is the most anticipated monthly report. As it's released at the begin Nonfarm Payrolls (NFP) is the single biggest monthly economic news indicator released out of the United States, usually on the first Friday of every month. Reported by the US Bureau of Labor Statistics, the NFP measures the increase or decrease in the number of people employed during the previous month, except for those working in the farming and agriculture industry.The NFP can also be referred to as an Employment Change, and is the most anticipated monthly report. As it's released at the begin Read this Term report.

The implied odds of a 75 basis point hike at the Sept 21 FOMC are down to 37% from 68% yesterday as the market senses peak inflation. We will get another CPI report before then but with gasoline prices continuing to fall, there's a good chance it's also low.

Along with the drop in the dollar, US equity futures are soaring with eminis up 75 points, or 1.8%.

Notably, the US dollar was curiously weak ahead of the data. Some traders noted that the White House didn't pre-announce anything about CPI. Previously, they had 'prepared' the public. Before the prior release, the White House said it expected the June reading to be 'highly elevated'. This time it was silence and whether that was deliberate or not, some saw it as a tipoff.