The euro, the pound and the yen all fell sharply. The euro lost 1.5% vs. u$s0.9973after having reached a maximum of almost a month of u$s1,0198 in the previous session. The single European currency has traded below parity in 16 of the last 17 sessions.
US consumer prices unexpectedly rose in August, as the drop in gasoline was offset by rising rent and food costs.
The pound fell 1.6% to $1.1499. Earlier in the day, it had hit a two-week high after the British jobless rate fell to its lowest level since 1974, while wages excluding bonuses rose 5.2%, the highest rate from three months to August 2021.
“The data was much stronger than expected. Of particular concern is the fact that core inflation almost doubled estimates,” said Karl Schamotta, chief market strategist at Corpay in Toronto.
“This is going to kill the idea of transitory inflation for now… We are now looking at almost certain odds of a 75 basis point move next week” by the Fed, he added.
The consumer prices in the united states they grew more than expected in August and reached 8.3% year-on-year, less than the 8.5% in July but more than the 8.1% expected. Although fuel fell, the rise was driven by rent and food costs.
The Chairman of the Federal Reserve, Jerome Powelldid not rule out that rates continue to rise and stressed that the monetary policy implemented by his institution will continue until inflation can be controlled.
“The data was much stronger than expected. Of particular concern is the fact that core inflation almost doubled estimates,” he said. Karl Shamottachief market strategist at Corpay in Toronto in dialogue with Reuters and added: “This is going to kill the idea of transitory inflation for now. We are facing almost certain probabilities of a movement of 75 basis points next week (by the of the Fed)”.
Source: Ambito
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