Was it wishful thinking that we’d finally hit peak inflation? Turns out it was – fresh CPI figures from the US well and truly opened eyes across the market.
While US headline inflation dropped marginally from 8.5% to 8.3%, the shift was much smaller than analysts’ estimates. More importantly, core inflation actually rose to 6.3% from 5.9% – missing expectations of a smaller 5.75% increase and sending various markets, including currency, into a tumble during overnight trading. Patrick Idquival from Ebury returns to ausbiz to discuss. He says that the Australian Dollar (AUD) was front and centre, losing more than 2% against the US Dollar (USD) after the inflation print. Given the macro environment, he now expects a cap of $0.69 US cents for the AUD. Meanwhile, the Pound Sterling picked up against both the AUD and USD, while the Japanese Yen surprised the market – rising about 1% following some positive news on the outlook from Japan’s central bank.
Find out more about what Patrick has to say here.