Better than expected headline CPI: 1.7% y/y in September and 0.1% m/m. Core CPI is exactly the same. The Fed can end QE as planned. In addition, real weekly earnings rose 0.2%, lower than 0.3% expected, but the prior number was revised to the upside: from 0.4% to 0.5%.
EUR/USD is sliding under 1.27 once again, GBP/USD is under 1.6050 and USD/JPY above 107.
Also the loonie is sliding, but this is also due to weaker than expected Canadian retail sales.
The US Consumer Price Index was expected to remain flat in September, and sliding to rise of 1.6% y/y. Core CPI was expected to rise 0.2% and stay at 1.7% y/y.
The Fed watches these inflation numbers but looks more closely at the Core PCE Price Index. However, this figure might cool down some of the doves that worry about a fall in inflation. The fall in oil prices was more marked in October, so this isn’t represented here.
More: Here Is Why The USD Will Rally Even Without Higher US Rates? – RBS
