The US dollar was weak in the first half of Wednesday’s trading session but reversed losses versus some currencies later, erasing them against others outright. Slight miss of inflation print did not prevent the rebound. In fact, the greenback climbed after the worse-than-expected data.
The Bureau of Labor Statistic reported that the Consumer Price Index was unchanged in January from the previous month, seasonally adjusted. Analysts had predicted a small increase by 0.1%. But despite the slight miss, the US currency rallied after the release.
Some experts argued that the dollar reacted positively to core inflation, which remained stable at 0.2% for the fourth consecutive month. It suggested that the US economy experiences stable growth.
Others speculated that the reason for the rally was optimism about the Sino-US trade talks. US Treasury Secretary Steven Mnuchin said that the talks were “so far, so good.”
EUR/USD slumped from 1.1324 to 1.1267 as of 21:25 GMT today. GBP/USD traded at 1.2847 after opening at 1.2890 and rising to the daily high of 1.2958. USD/JPY jumped from 110.47 to 111.02.
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