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USD slips after CPI matches expectations, with Fed hike odds easing

After CPI printed in line with forecasts, September Fed hike odds fell to 42.1%, and US Treasury yields moved lower.

Reported · Written up by our desk · Major Pairs

Forexlive reports that the US CPI release came in right in line with expectations for both headline and core readings, which steadied market confidence that the broader inflation trend is continuing in the right direction.

The report also highlighted that shelter costs accounted for roughly two-thirds of the monthly increase, implying that inflation would look meaningfully better if housing-related pressures begin to ease. The market reaction was described as modestly dovish, with expectations for a September Fed rate hike slipping from around 46% to 42.1%.

Treasury yields fell after the CPI data, with the 2-year yield down 4.2 basis points to 4.176% and the 10-year yield lower by 2.8 basis points to 4.655%. US stocks were also higher in futures trading, with the Dow up 150 points, the S&P up 29 points, and the Nasdaq 100 up 100 points.

Forexlive additionally discussed post-CPI price action and technical levels across major currency pairs, focusing on EURUSD, USDJPY, GBPUSD, USDCHF, and USDCAD, including where buyers and sellers have control and what levels could shift the bias.

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