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EUR/USD Rallies Higher on US CPI Data Ahead of FOMC Decision

December 13, 2017 at 15:21 by Simon Mugo

Packs of US 100-dollar billsThe EUR/USD currency pair today rallied to new highs during the early American session after the release of US CPI data by the Bureau of Labor Statistics. The currency pair had earlier dropped to new daily lows after an increase in US Treasury bond yields, which increased demand for the greenback.

The EUR/USD currency pair rallied from a daily low of 1.1730 to hit a daily high of 1.1771 shortly after the release of the US CPI data.

The Core CPI print was the main trigger behind the euro’s rally as it missed expectations negating any gains that could have been attributed to the overall CPI figure, which was in line with expectations. The overall CPI print met expectations by coming in at 2.2% on an annualized basis, while the core CPI came in at 1.7% on a yearly basis in November, which was below the market consensus of 1.8%. Real average hourly earnings for all employees decreased 0.2% from October to November, seasonally adjusted.

The euro opened today’s session on an uptrend against the US dollar, which was reversed by higher US treasury bond yields, which caused the US Dollar Index to hit a high of 94.11. Investors seemed to ignore the win by a Democratic candidate in the Alabama Senate election.

The currency pair’s short-term performance is likely to be affected by the FOMC rate decision and President Donald Trump‘s speech on tax reform, both scheduled for later today.

The EUR/USD currency pair was trading at 1.1762 as at 15:17 GMT having dropped slightly from a daily high of 1.1771. The USD/JPY currency pair was trading at 113.12 having declined from a high of 113.54 earlier today.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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