US Consumer Price Inflation declines for third straight month in December. US Dollar mixed in Forex Trading. | CountingPips Forex Blog

January 16, 2009 - Forex Economic News

US Consumer Price Inflation declines for third straight month in December. US Dollar mixed in Forex Trading.

Consumer prices in the U.S. decreased for the third straight month in December according to a report released today by the U.S. Department of Labor. The Consumer Price Index, a measure of inflation, fell by 0.7 percent in December after declining by a revised record 1.7 percent in November as falling energy prices continued to decrease and contributed significantly to the lower cpi levels. On USD mixed in Forex Trading. an annual basis, consumer prices registered a 0.1 percent increase over the December 2007 level following a 1.1 percent annual increase in November. December's price decline failed to surpass economic forecasts that were expecting a 0.9 percent monthly decline and a 0.1 percent annual decrease.

Core consumer prices, excluding food and energy prices, showed no change in December following no change in November. The annual change in core prices showed a 1.8 percent increase over December 2007 following November's 2.0 percent annual increase. Market forecasts were predicting core inflation to register a monthly increase of approximately 0.1 percent and an annual increase of 1.9 percent.

Contributing heavily to the lower consumer prices was a decrease in the price for energy as the energy index fell by 8.3 percent in December while the gasoline price index also showed a significant 17.2 percent decline. The energy index has fallen for five straight months. Also showing declines in December were transportation with a 4.4 percent fall, apparel with a 0.9 percent decline and food with a 0.1 percent decrease. Showing price increases in December were medical care at a rise of 0.3 percent and education & communication with a 0.3 percent gain.

US Dollar mixed in Forex Trading.

The U.S. dollar has been mixed in forex trading against the major currencies today. The dollar has gained against the Australian dollar, Canadian dollar, New Zealand dollar, Japanese yen and British pound while losing ground against the Swiss franc and the euro.

The euro has advanced versus the dollar from today's 1.3221 opening at 00:00GMT to trading at approximately 1.3256 in the afternoon of the US trading session at 2:12pm EST. The euro had lost ground to the USD everyday this week before rallying late in the day yesterday. The British pound has decreased today versus the dollar after increasing for two days in a row as the GBP/USD has gone from its 1.4772 opening to trading at 1.4706 in the afternoon.

The dollar has also been rising against the Japanese yen today as the USD/JPY has advanced from its 90.40 opening to trading at 90.63 later today. Against the Swiss franc, the USD has been falling today after gaining yesterday as the USD/CHF has declined from its 1.1207 opening to trading at 1.1188.

The dollar has advanced against the Canadian dollar after opening at 1.2456 earlier today to trading later at 1.2486. The New Zealand dollar has declined versus the US dollar after opening at 0.5465 today as the NZD/USD currently trades at 0.5421. The Australian dollar has also lost ground versus the USD with the AUD/USD trading at 0.6682 after opening today at 0.6731.

USD/JPY Chart - The US Dollar gaining today against the Japanese Yen and trading just below the 21 day simple moving average. (Daily Chart).

Today's Forex Chart

tags: Eurozone, interest rates, ECB, Trichet, Euro, Forex Trading

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