How will the US dollar respond to inflation?

US inflation remains low despite the Fed's withdrawal of stimulus, but coming months could see the US dollar confound market expectations.

If markets behaved in line with theory, which they of course don’t always do, then one would have expected Friday’s positive US economic data to have triggered some upside on the US dollar. Not only was consumer sentiment at its highest since July 2013 but producer prices also reached levels not seen since the same month.

PPI turned around a -0.1 per cent result the previous month to come in at 0.5 per cent, taking the annualised number to 1.4 per cent. The chart below shows how closely linked PPI (supply-side inflation) and CPI (demand-side inflation) are.

{{content.question}}

Mastercard

{{ twilioFailed ? 'SMS Code Failed to Send…' : 'An SMS verification code has been sent ...' }}

Hi {{ user.FirstName }}

Looks like you have already taken a free trial

Please enter your payment details

We have sent you a code via SMS to {{user.DayPhone}}

please enter this code below to complete your SMS verification

We cannot send you a code via SMS to {{user.DayPhone}}

If you didn't receive SMS code please

SMS code cannot be sent due to: {{ twilioStatus }}

Please select one of the options below:

Looks you are already a member. Please enter your password to proceed

Please untick this box when using a public or shared device


Verify your mobile number to proceed...

Please check your mobile number below and press the Send Verification Code button. This will be used to complete your verification in the next step.

Please sign up for full access

Mastercard

Updating information

Please wait ...

Trial

Mastercard
{{ productPrice }} / day
( GST included )
Price $0
GST $0
Discount -{{productDiscount}}
TOTAL {{productPrice}}
  • Mastercard
  • Visa

Please click on the ACTIVATE button to finalise your membership

Mastercard

The email address you entered is registered with InvestSMART.

Please login or select "Don't know password"

Please untick this box when using a public or shared device


Register as a new member

(using a different email)

Related Articles