The US Dollar strengthened to a four-week high of 102.51 after October core CPI rose 0.30%, pushing EUR/USD down to 1.1138 as traders price in a 13.5% chance of a 50bps Fed hike.
October core CPI came in at +0.30% versus +0.2% expected, the third straight +0.3% month, pushing markets to price a possible 50bps Fed hike in December (13.5% odds). The dollar strengthened, with DXY at a fresh almost four-week high of 102.51, and EUR/USD fell 0.2% to 1.1138, holding below the 20-day EMA at 1.1200 with the RSI at 41.
October core CPI at +0.30% versus +0.2% expected, the third consecutive +0.3% print, makes it hard to dismiss inflation acceleration. Markets have begun pricing a possible 50bps Fed hike in December, lifting the DXY to a fresh almost four-week high of 102.51 and making the dollar the strongest against the Swiss Franc today.
The EUR/USD pair fell 0.2% to 1.1138 on Wednesday as the US Dollar Index reached a four-week high of 102.51. Markets are reacting to October core CPI data, which printed at +0.30% against expectations of +0.2%, fueling speculation of a potential 50bps Federal Reserve rate hike in December.
US inflation data for October came in above expectations (core CPI +0.30% vs +0.2% expected), raising fears of a more aggressive Federal Reserve and lifting the dollar, which pushed the pair down 0.2% to near 1.1138.
The recent low of 1.1104 is the immediate support, with 1.1000 below it; a recovery above the 20-day EMA near 1.1200 would be needed to ease the bearish bias.
Hotter-than-projected October US CPI (core +0.30% vs +0.2% expected) raised fears the Fed could tighten more aggressively, even pricing a possible 50bps December hike, pushing the DXY to a fresh almost four-week high of 102.51.