US inflation was at 2.3% in December, compared to 2.1% in November. The core measure remained steady at 2.3% y/y. The reading is in line with the consensus, although monthly change was somewhat below expectations. While the price growth could look solid, bear in mind that the Fed pays more attention to the PCE inflation which is lower.
The US dollar has been doing well today especially against the yen (USDJPY at multi-month highs) but also the EURUSD erased yesterday gains. The reading is neutral and should not be decisive for the FX market today. There are still many US releases this week, especially retail sales on Thursday.
Declining wage growth should keep inflation pressure contained. Source: Macrobond, XTB Research
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