US dollar gives back CPI pop

US dollar unable to sustain the bid

The rise in US inflation is turning into more of a reflation trade and less of dollar rally.

Here's the thinking:

Inflation is global and higher US prices are a sign of what's happening elsewhere as well. There are a handful of central banks that are more inclined towards hiking than the Fed -- the BOC and BOE for starters (though say what you will about the unreliable girlfriend).

So GBP is back to pre-CPI levels and USD/CAD is now lower, falling quickly to 1.2617 from 1.2660 a the post-CPI high. Part of that is a turnaround in commodities, including oil. There's a race into hard assets with prices running.

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November 11, 2021 at 01:58AM
Adam Button
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