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The US Labour Department is all set to announce the nation’s inflation data for the month of July on Wednesday, August 10, 2022.
US inflation accelerated once again to a new four-decade high in June, which strengthened the Federal Reserve’s aggressive policy stance and resulted in a further 75 bps rate hike at its recent meeting.
The Consumer Price Index increased 9.1% year-over-year in June, recording the largest rise since the end of 1981. The widely followed inflation gauge, meanwhile, rose 1.3% from a month ago, which is the highest since 2005, driven by a surge in gasoline and food prices.
Analysts, however, were expecting an 8.8% year-over-year rise, with a 1.1% monthly increase. The country’s headline annual numbers exceeded market expectations for the fourth consecutive month.
So, what does the market expect for July’s inflation rate?
The inflation rate was expected to continue moving higher in July, with the annual inflation rate expected to have increased to 9.2% during the month. However, the monthly inflation figure might provide some relief to the markets, as consumer prices are likely to increase just 0.9% from a month ago in July, compared to a 1.1% rise in the prior month. The core inflation rate might also ease to a 5.8% rise from a year ago.
US dollar prospects
Th continuous surge in inflation resulted in the US dollar index, which measures the currency’s performance versus a basket of major peers, surging to a 20-year high. The greenback might not be able to continue with its bull run in the near term if inflation numbers ease. The USD also gave up some gains during the latter part of July, after the final University of Michigan data showed consumers’ inflation expectations easing in July.
Are your trades set up for the US inflation data?
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