Consumer prices in the U.S. increased in January after falling for three months in a row according to a report released today by the U.S. Department of Labor. The Consumer Price Index increased by a seasonally adjusted 0.3 percent in January after falling by a revised 0.8 percent in December. Consumer prices had fallen by a record 1.7 percent in November and declined by 0.8 percent in October as energy prices came crashing down after registering record high levels in July 2008.
On an annual basis, consumer prices showed no change from the January 2008 level. Today’s data matched economic forecasts predicting a 0.3 percent monthly increase while the annual change slightly surpassed forecasts expecting an annual decline of 0.1 percent.
Contributing to the increase in consumer prices was a rise in the price for energy as the energy index increased by 1.7 percent in January. The gasoline index also rose by 6.0 percent in January after fallng by 19.3 percent in December. The energy index had declined for five straight months before January and is 31.4 percent lower than level of July 2008.
Core consumer prices, excluding food and energy prices, increased by 0.2 percent in January following no change in December. The annual change in core prices showed a 1.7 percent increase over January 2008 following December’s 1.8 percent annual increase. Market forecasts were predicting core inflation to register a monthly increase of approximately 0.1 percent and an annual increase of 1.5 percent.
US Dollar falling in forex trading near midday Friday.
The U.S. dollar has been under pressure in forex trading today against the major currencies so far today. The dollar has fallen against the euro, Australian dollar, British pound, Swiss franc, New Zealand dollar and Canadian dollar while trading slightly higher against the Japanese yen.
The euro has advanced versus the dollar for the second day in a row as the EUR/USD has gone from today’s 1.2592 opening exchange rate at 00:00 GMT to trading at approximately 1.2633 in the US trading session at 11:39pm EST.
The British pound has increased today versus the American currency from 1.4215 to trading at 1.4295 dollars per pound. The USD has declined against the Swiss franc from the 1.1800 opening to trading at 1.1771. The dollar has decreased against the Canadian dollar after opening at 1.2592 earlier today to trading at 1.2581 before noon.
The Australian dollar has also traded higher versus the USD as the AUD/USD trades at 0.6411 after opening today at 0.6394 while the New Zealand dollar has gained versus the USD and trades at 0.5063 after opening at 0.5038.
The dollar has advanced slightly against the Japanese yen today as the USD/JPY has gained from its 94.12 opening to trading at 94.28.
GBP/USD Chart – The British Pound advancing today against the US Dollar in Forex Trading and trading right below its 21-day simple moving average.
