The US dollar failed to hold onto the gains it posted after the above-consensus US CPI prints. It gained at the time of the release, but came under massive selling interest quickly thereafter, and continued to tumble throughout the day as US stock indices ignored the data and drifted north.
The dollar underperformed all the other G10 currencies yesterday despite the US CPI data coming in above market expectations. The main gainers were NOK, NZD and SEK in that order.
On Wednesday, the event of the day was the release of the US CPI data for January. Headline consumer prices rose +2.1% yoy, the same pace as in December, confounding expectations of a slowdown to +1.9%. The core rate remained also unchanged at +1.8% yoy. Expectations were for a tick down to +1.7%.
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