A surprisingly high US inflation boosted the dollar on Tuesday. In return, the euro fell by just under one US cent to $ 1.1772. The unexpected sharp rise in consumer prices in the USA gave new impetus to speculation that the Fed would turn interest rates prematurely. That drove the greenback higher against major currencies. US Treasuries flew out of the depots. The ten-year bonds yielded accordingly higher at 1.39 percent.
The rate of price increases in the USA continued to rise from an already high level. The inflation rate climbed in June by 5.4 percent compared to the same month last year, as the US Department of Labor announced. Experts had expected a slight decrease to 4.9 percent. In May the rate of price increase was 5.0 percent. “The spook of inflation is not over yet,” said economist Bastian Hepperle from Bankhaus Lampe. At the moment, it was mainly energy prices, but also corona-related catch-up effects, which were causing sustained inflationary pressure. But all of these influencing factors are not permanent and will soon lose their driving force.
The US Federal Reserve (Fed) has also assumed that rising inflation will remain a temporary phenomenon. Because compared to the previous year, there are high rates of price increases due to the economic downturn in 2020. The Fed continues to support the economy with monthly cash injections of $ 120 billion. It also wants to hold on to bond purchases until substantial progress has been made on price stability and unemployment.
Strong export figures from China supported prices on the oil market. A barrel of North Sea Brent cost $ 76.53 1.8 percent more. Another possible decline in US inventories also boosted prices. Experts expect 4.4 million barrels less crude oil and 1.8 million barrels less gasoline for the past week.