The US Dollar index was trading near unchanged after the latest inflation figures from the U.S. economy showed a slightly softer tone in prices. This will be a boost for the Federal Reserve as the numbers are still higher than many other developed nations but not moving too fast towards their 2% target.
Markets were expecting inflation minus food and energy to be 1.3%, which would be lower than last month’s 1.4%. The number came in lower still at 1.2%. In the core number with food and energy added, the number was 1.6% compared to a 1.8% expectation. The numbers won’t change projections for rate rises in 2032 as it is still too early to call.
German inflation figures earlier in the day showed a reading of -0.2%, which was in line with predictions and highlights the deflationary tone that still exists in the Eurozone. This won’t be helped by the ongoing lockdown situation in the bloc. Tomorrow will see a second estimate for EU GDP in the third quarter, alongside U.S. Michigan Consumer Confidence figures later.
The dollar index is still at risk of volatility from the U.S. elections as the Trump campaign look to put a case together for voter fraud in the recent Presidential election. In Georgia, Secretary of State Brad Raffensperger told reporters that a planned audit would see a “full by-hand recount in each county” due to the slim winning margin. Trump was also confirmed as the winner in the state of Alaska.
Dollar Index Technical Outlook
The Dollar index has rallied from its recent lows this week and 92.50 is now additional support ahead of 92.00. On the upside we have the 50-day moving average at 93.50 ahead of stronger resistance at 94.00. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
Dow Jones Daily Chart