The dollar fell against most major currencies yesterday following better-than-expected inflation figures. The greenback has regained a little strength this morning.
US inflation came in at 8.5% in July, down from 9.1% in June. This is thought to be due to a fall in petrol prices. Consequently, markets are now adjusting their predictions for the next Federal Reserve interest rate hike. A 50 basis point hike is now thought to be more likely than the previously predicted 75 basis point hike.
Other interesting data releases include the producer price index, which unexpectedly fell by 0.5% in July after a 1% rise in June, and initial jobless claims, which increased by 14,000 last week.
Today, Michigan consumer sentiment figures will be released and will give an indication of how optimistic US consumers feel about their finances and the state of the economy.
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