US inflation fall short of expectations. The Fed probably knew that and that could explain part of the dovish approach. But not all the figures are negative.
CPI rose only 0.4% m/m, unchanged y/y. Core inflation rose only 0.1% m/m and 1.7% y/y.
However, we do get good news from jobless claims, which dropped to 267K, better than expected. In addition, the current account deficit stands at 113 billion, better than expected, and it is accompanied by a positive revision for Q4. The data could affect GDP figures.
The US dollar ticked down, with EUR/USD hitting a new high of 1.1427 before sliding a bit lower. The pair made a convincing break of the double top.
USD/JPY dipped under 122.50, GBP/USD reached out to 1.5928, which seems to form as strong resistance.
A big bulk of US figures is released: CPI was expected to rise 0.5% month over month in May after 0.1% in April. Year over year, no change was predicted after a drop of 0.2% beforehand.
More importantly, Core CPI carried expectations for +0.2% m/m (after +0.3% in April) and the year over year level that the Fed watches was predicted to remain at 1.8%.
Weekly jobless claims carried expectations for a small slide to 275K after 279K last week and the US current account deficit was predicted to rise to $117 billion in Q1 2015 after $113 billion in Q4 2015.
The US dollar was on the back foot following the dovish message from the Fed.
