US Consumer Price Index (CPI) Preview (OCT 2024)

US Consumer Price Index (CPI)

The US Consumer Price Index (CPI) narrowed less-than-expected in in September, with the headline reading slipping to 2.4% from 2.5% per annum the month prior amid forecasts for a 2.3% print.

US Economic Calendar – October 10, 2024

At the same time, the core CPI unexpectedly widened to 3.3% from 3.2% during the same period, with the update from the Bureau of Labor Statistics (BLS) revealing that ‘the shelter index increased 4.9 percent over the last year, accounting for over 65 percent of the total 12-month increase in the all items less food and energy index.’

The report goes onto say that ‘other indexes with notable increases over the last year include motor vehicle insurance (+16.3 percent), medical care (+3.3 percent), personal care (+2.5 percent), and apparel (+1.8 percent).’

EUR/USD Chart – 15 Minute

Chart Prepared by David Song, Strategist; EUR/USD on TradingView

The US Dollar showed a kneejerk reaction to the US CPI report, with EUR/USD bouncing back from 1.0900 to end the day at 1.0937. EUR/USD nudged higher over the remainder of the week to close at 1.0936, but the exchange rate struggled to hold its ground the following week as it closed at 1.0867.

Looking ahead, the update to the US CPI is anticipated to show the headline reading widening to 2.6% in October from 2.4% per annum the month prior, while the core rate of inflation is seen holding steady at 3.3% during the same period.

With that said, evidence of persistent price growth may spur a bullish reaction in the Greenback as it puts pressure on the Federal Reserve to further combat inflation, but a softer-than-expected CPI report may produce headwinds for the US Dollar as it fuels speculation for another Fed rate-cut in December.

Additional Market Outlooks

GBP/USD Outlook Hinges on Break of Monthly Opening Range

US Dollar Forecast: USD/JPY Defends Post-US Election Rally

US Dollar Forecast: EUR/USD Opening Range in Focus Ahead of US CPI

USD/CAD Still Holds Below Monthly High Following Dovish Fed Rate Cut

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong