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September 14, 2021

This Is Why Today's US Inflation Data Is Important For Traders

 The US dollar giant traded little changed against most major currencies in the Asian session as markets focused on the publication of US inflation data tonight.


The dollar index, which measures the strength of the greenback, slipped slightly from its previous two -week high, trading around 92.62.


Analysts expect core inflation, excluding energy and food prices, to rise 0.3% in August from July. Annual inflation was seen declining slightly to 4.2% from 4.3%.


Growth in overall consumer price inflation is expected to slow slightly to 5.3% from 5.4%, according to market projections.



These inflation readings will be scrutinized and used as an indication of the timeline of stimulus reduction by the Federal Reserve (Fed).


The US central bank will hold its policy meeting next week. The Wall Street Journal reported on Friday that Fed officials will likely seek approval to begin bond purchases in November.


Meanwhile, Philadelphia Fed President Patrick Harker became the latest policymaker to express his support for the central bank to begin making cuts this year.


Limited movement in the currency pair saw investors reduce expectations for market changes ahead of the release of key data.


The euro gained little from the depreciation of the US dollar in the previous session, to return to trade above the 1.1800 price level in the Asian session today.