US Dollar Index Pops After US GDP Reading Reveals Inflationary Forces Still at Work
The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is breaking above 107.00 for the first time in five trading days, after some important US data releases which are putting inflation concerns back on the map. The DXY initially this Thursday was receiving a bit of a tailwind from the Gold and US yields sell-off. The move came after United States (US) President Donald Trump spoke about tariffs during his first real cabinet meeting on Wednesday, leaving reports puzzled on what levies would be imposed to which countries and the timing.
The US President added that Europe must brace as well for a 25% tariff on autos and other things, but he did not specify when these levies would come into effect. Trump lashed out at the bloc saying it was created only “to screw the United States”.
In the meantime, the second US Gross Domestic Product reading (GDP) for the fourth quarter has turn that mild tailwind into a big one. The headline GDP reading came in higher, which as a surprise, while the inflation elements were turning hot as well. This just one day ahead of the Federal Reserve's (Fed) preferred inflation gauge, the Personal Consumption Expenditures reading (PCE), inflation is back on the agenda.
Source : Fxstreet
