The US CPI is expected to narrow to 2.9% in February from 3.0% per annum the month prior, with the core rate also anticipated to fall to 3.2% from 3.3% during the same period.
By : David Song, Strategist
US Consumer Price Index (CPI)
The US Consumer Price Index (CPI) unexpectedly widened to 3.0% in January from 2.9% per annum the month prior, with the core rate also rising to 3.3% from 3.2% during the same period.
US Economic Calendar – February 12, 2025
A deeper look at the report showed the CPI increasing 0.5% in January following the 0.4% rise the month prior, with the Bureau of Labor Statistics (BLS) noting that ‘the index for shelter rose 0.4 percent in January, accounting for nearly 30 percent of the monthly all items increase.’
According to the BLS, ’the shelter index increased 4.4 percent over the last year, the smallest 12-month increase since January 2022,’ with the report going onto say that ‘other indexes with notable increases over the last year include motor vehicle insurance (+11.8 percent), medical care (+2.6 percent), education (+3.8 percent), and recreation (+1.6 percent).’
Join David Song for the Weekly Fundamental Market Outlook webinar.
EUR/USD Chart – 15 Minute
Chart Prepared by David Song, Senior Strategist; EUR/USD on TradingView
The US Dollar showed a bullish reaction to the stronger-than-expected CPI print, with EUR/USD slipping to a fresh daily low of 1.0317. However, the initial reaction was short-lived as EUR/USD ended the day at 1.0383, with the exchange rate appreciating throughout the remainder of the week to close at 1.0492.
Looking ahead, the US CPI is expected to narrow to 2.9% in February from 3.0% per annum the month prior, with the core rate also anticipated to fall to 3.2% from 3.3% during the same period.
With that said, indications of slowing inflation may drag on the US Dollar as it raises the Federal Reserve’s scope to further unwind its restrictive policy, but another higher-than-expected CPI print may spur a bullish reaction in the Greenback as it encourages the Fed to keep US interest rates on hold.
Additional Market Outlooks
Euro Forecast: EUR/USD on Cusp of Testing November High
Canadian Dollar Forecast: USD/CAD Faces BoC Rate Cut as Trump Tariffs Loom
Gold Price Outlook Hinges on Response to Positive Slope in 50-Day SMA
US Dollar Forecast: USD/JPY Weakness Pushes RSI Towards Oversold Zone
— Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Click the website link below to read our Guide to central banks and interest rates in 2025
https://www.cityindex.com/en-au/market-outlooks-2025/FY-central-banks-outlook/
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.