The dollar index fell following yesterday’s decision by President Trump to fire his Secretary of the State. This came as the bureau of labor statistics released a report showing that inflation had edged lower but in line with what analysts were expecting. The Month over Month (MoM) Core CPI rose to 0.2% while the annualized rate was at 1.8%. Broadly, the CPI number showed that inflation rose by 2.2%. While the latter is above the Fed’s target, the officials rarely use it because of the increased fluctuations because of food and fuel prices.
After the report, the dollar index fell by almost 10 basis points. The main outlier in the index was the Great Britain Pound which rose following a report by Phillip Hammond, the exchequer secretary. In his statement, he raised the short-term growth forecast for the country and indicated that the debt to GDP ratio would continue to fall. By 2022, it will be 78.9%, which is lower than the current 82.7%.
The dollar index and the currency pairs that make it will continue being volatile this week. Today, we will receive the manufacturing data from China and on Friday, we will receive the inflation data from the European Union.