The US dollar remained steady from yesterday’s retail sales data report until early hours today, and took off higher after the reported US inflation data.

Investors were cautious over the data due today thus why the dollar traded in a limited range earlier in the session. However, current gains are still capped by the anticipation brought by the Federal Reserve’s two-day policy meeting scheduled next week.

Greenback was buoyed by better-than-expected inflation data. The Commerce Department said the consumer price index climbed 0.2% in August, surpassing a forecast of a 0.1% increase and after reading flat in July. Consumer prices in year-over-year rose 1.1%, beating expectations of a 1.0% gain.

Core CPI, excluding food and energy expenses, ticked up 0.3% in the month prior, above expectations for a 0.2% increase and following July’s 0.1% rise.


Series of US Data Turns Mixed

On Thursday, the Commerce Department announced that US retail sales decline 0.3% last month, falling below expectations of only a 0.1% drop. It was the first reported decline in five months and consequently dampened hopes for a rate hike.

Separately and in contrast, the Department of Labor cited that individuals who claimed initial jobless benefits increased less than expected in the week prior, indicating further tightening in the seemingly stronger labor market.

However, the department also claimed that US producer prices fell flat in August.

This mixed data is leading to the assumption that the US central bank may leave interest rates unchanged in its September 20-21 policy meeting.


Dollar Analysis

The dollar tacked on 0.62% to 95.86 as of 13:20 GMT, the current two-week high.  While the string of US data since last week turned mixed, situations for other currency are seeming downbeat thus providing a boost to the dollar further.

For instance, GPB came under pressure after the Bank of England kept monetary policy on hold yesterday, but also hinted it could slash rates again by November unless the economy improves.

Nonetheless, September 16’s inflation data was a large boost for the greenback as it managed to climb to an intraday high that hit September 2’s highest level. The current candle is trying to break its resistance level of 95.71. We forecast the US dollar to remain steady in the green, as the mixed data will still lend support to the currency. It is important to note the caution brought about the Fed’s meeting due next week.


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