The US dollar weakened against sterling in a surprise move yesterday, thanks to positive movement for the UK currency. However, the dollar strengthened against the euro in what was a mixed day for currency markets.
The only significant US data release was the Consumer Price Index (CPI). A measure of inflation, the figure a slight improvement on the last month’s, which was as expected. However it was the core figure, which strips out food and energy prices that dropped against the expectation.
We are expecting minimal major data release today, with figures for building permits and crude oil inventories due. Neither of these releases tend to move the market unless we see a significant deviation from expectations. Otherwise, US dollar strength will be exposed to risks from events happening elsewhere.