Forex Today: Hot US CPI boosts US Dollar as Treasury yields climb
Here is what you need to know for Wednesday, May 13:
The US Dollar Index (DXY) rallied toward the 98.30 region on Tuesday as hotter-than-expected United States (US) inflation data boosted Treasury yields and reinforced expectations that the Federal Reserve (Fed) may keep interest rates elevated for longer.
The latest US Consumer Price Index (CPI) report showed headline inflation accelerated to 3.8% YoY in April, above market expectations near 3.7%, while monthly CPI rose 0.6%. Meanwhile, Core CPI climbed 0.4% MoM and 2.8% YoY, signaling persistent underlying inflation pressure and reducing expectations for Fed rate cuts later in the year.
The 10-year US Treasury saw its yield climb by 1.10% to 4.46%, while the 30-year rose 0.80% to 5.03%.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.34% | 0.53% | 0.22% | 0.15% | 0.16% | 0.18% | 0.34% | |
| EUR | -0.34% | 0.18% | -0.11% | -0.22% | -0.18% | -0.18% | -0.00% | |
| GBP | -0.53% | -0.18% | -0.32% | -0.41% | -0.36% | -0.34% | -0.19% | |
| JPY | -0.22% | 0.11% | 0.32% | -0.10% | -0.08% | -0.05% | 0.09% | |
| CAD | -0.15% | 0.22% | 0.41% | 0.10% | 0.01% | 0.04% | 0.19% | |
| AUD | -0.16% | 0.18% | 0.36% | 0.08% | -0.01% | 0.02% | 0.17% | |
| NZD | -0.18% | 0.18% | 0.34% | 0.05% | -0.04% | -0.02% | 0.15% | |
| CHF | -0.34% | 0.00% | 0.19% | -0.09% | -0.19% | -0.17% | -0.15% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
EUR/USD dropped toward the 1.1740 region as the stronger USD dominated the market following the inflation release. Investors also remained cautious ahead of additional comments from European Central Bank (ECB) officials and continued monitoring the impact of elevated energy prices on the Eurozone economy.
GBP/USD fell near the 1.3540 area, pressured by broad USD strength and weaker risk appetite. Rising fiscal uncertainty after recent reports showed weakening consumer spending and softer business confidence. Concerns that elevated energy prices could further weigh on household demand and economic growth also continued to limit support for the Pound Sterling.
USD/JPY climbed toward the 157.60 zone as rising US Treasury yields and stronger USD demand supported the pair. However, concerns about possible intervention from Japanese authorities continued to prevent a more aggressive upside move.
AUD/USD declined toward the 0.7240 region as the hotter US inflation data boosted the Greenback and weighed on risk-sensitive currencies.
West Texas Intermediate (WTI) Oil traded above the $102.00 per barrel region as geopolitical tensions surrounding Iran and the Strait of Hormuz maintained fears of potential supply disruptions.
Gold (XAU/USD) slipped toward the $4,700 area as the stronger USD and rising Treasury yields pressured the precious metal, although geopolitical uncertainty continued offering some safe-haven support.
What’s next in the docket:
Wednesday, May 13:
- AU Q1 Wage Price Index QoQ
- NZ Q2 RBNZ Inflation Expectations QoQ
- FR April CPI EU norm YoY
- EU Q1 Employment Change QoQ Prel
- EU Q1 GDP s.a. QoQ Prel; EU Q1 GDP s.a. YoY Prel
- EU March Industrial Production s.a. MoM
- US April PPIs; US April Core PPIs
Thursday, May 14:
- AU May Consumer Inflation Expectations
- UK March GDP MoM; UK Q1 GDP QoQ Prel; UK Q1 GDP YoY Prel
- UK March Industrial Production MoM; UK March Manufacturing Production MoM
- DE April HICP YoY
- US Initial Jobless Claims
- US April Retail Sales MoM; US April Retail Sales Control Group; US April Retail Sales ex Autos MoM
- NZ April Business NZ PMI
Friday, May 15:
- FR April CPI EU norm YoY; FR April CPI YoY
- US May NY Empire State Manufacturing Index
- US April Industrial Production MoM
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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