US CPI rises below estimates

Inflation growth in the US slowed Y/Y, registering 3.3% in May compared to 3.4% in April, investors now turn a close eye to the FOMC minutes.

By Nadia Elbilassy | @Nadia Elbilassy | 12 June 2024

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  • The dollar initially firmed to a 4-week high before tumbling to 104.46 after the CPI report.

  • EUR/USD rose to $1.0819, recovering from a more than 1% drop over the last week.

  • Oil prices held gains near $82 per barrel for Brent and $78 for WTI, while gold prices moved above $2330 following the CPI news.

Inflation growth in the US slowed Y/Y, registering 3.3% in May compared to 3.4% in April. On a monthly basis, the index declined to 0% from 0.3%.

The core index, which excludes food and energy, also slowed Y/Y, recording 3.4% compared to 3.6% in April. On a monthly basis, the core index decreased to 0.2%.

The dollar was marginally firmer hitting a 4-week high during the day ahead of the CPI report before tumbling to 104.46 while the USDJPY traded choppily near the 156-157 region.

The EUR/USD shot higher to $1.0819, after the pair dropping over a full percentage point in the last week.

The European Parliament elections, which concluded over the weekend, saw significant shifts to the right in several countries, in France. Prompting French President Emmanuel Macron to call a snap legislative election earlier on in the week, a move that risks his political future by potentially handing major political power to Marine Le Pen’s far-right party.

Oil prices gained marginally, maintaining a two-day increase. Brent was last seen near $82 per barrel, while WTI was steady near $78.

Gold prices lacked direction ahead of the CPI reading and broke the $2330 following the news after keeping steady since the opening near $2,313.

Investors will now turn to key announcements and the Fed's dot plot later in the day.