US Preview: CPI seen stagnating in December for second month in row

By FXStreet FXStreet (Mumbai) – US CPI data will be released today at 13.30 GMT. The data will likely reflect the negative impact of oil slump and strong dollar on prices. Month on month, CPI is expected to have stagnated in December, unchanged from November’s reading. Inflation however is expected to have risen 0.8 per cent year on year in December, up from the 0.5 per cent reading seen in November. The core CPI excluding food and energy costs is likely to increase to 2.1 per cent year on year, marking the fastest pace of rise since July 2012.

Factors which weigh on prices

Collapse in oil prices made fuel cheaper for Americans. The US consumer price basket is being pulled in opposite directions. Strong dollar on the other hand lowered the prices of goods like appliances, toys, tools or clothing which are shipped to the US after being produced elsewhere. The value of goods produced overseas fell the moment they were converted to dollar. This factor forced US manufacturers to lower prices of goods as they struggled to stay competitive when pitted against foreign rivals. Raw materials which have become less expensive also hurt prices of finished goods.

The wages in the US has …read more

Source:: FX Street