The U.S. Dollar maintained recent gains after an across the board strengthening which came after inflation data showed a large and surprise increase which sparked investor speculation that the Fed may be closer to considering raising interest rates. Analysts’ expectations were that the consumer price index or CPI would rise 0.2% but the actual numbers for May came in at 0.4%, and with the inflation closely tracked by the Fed, many are eager to hear what Janet Yellen might have to say about so large an increase at the press conference which follows today’s Fed decision.
As reported at 11:07 a.m. (JST) in Tokyo, the U.S. Dollar Index crept up to 80.607 .DXY, a gain of 0.2%. The USD/JPY touched on a 1-week peak at 102.245 Yen, while the EUR/USD was trading at $1.3547.
Timing of Policy Changes Likely
Analysts say that the rise in inflation is one that the Fed won’t be able to easily dismiss, and while experts had anticipated that QE would once again be curtailed by $10 billion a month, there had been expectations that other policy measures would remain in place, with only perhaps Yellen hinting at timing of future events. However, analysts believe that the CPI data may have changed that timing.