Immediately after the release of the interest rate decision in the EU on Thursday, the Bureau of Labor Statistics in the US issued the latest adjustments to the CPI index and presented weaker monthly gains in August as opposed to the robust growth that was recorded in July.
“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in August on a seasonally adjusted basis after rising 0.3 percent in July, the US Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment.” [source]
Thus, inflation on a month-to-month basis expectedly grew at a more muted pace in August, which can be attributed to the on and off trade negotiations between China and the US as American consumers have been spending less.
Because of that, the overall inflation rate fell from 1.8 per cent in July to 1.7 per cent in August, which is undoubtedly going to raise concerns amongst FED representatives because the observed deterioration of the rate is driving away from the bank's 2 per cent symmetric target. If the situation continues to worsen in the future, the FOMC might be inclined to consider cutting the interest rate further, in order to support a more robust price setting in the country.
As a result of the muted inflation, the Dollar Currency Index fell with 0.27 per cent on Thursday, as the price bounced back from the resistance level at 98.63.