U.S. consumer price inflation likely accelerated in August

U.S. consumer price inflation is likely to have accelerated in August. According to a TD Economics research report, the headline CPI inflation is expected to have risen to 1.9 percent year-on-year, with prices up 0.4 percent sequentially. Energy prices would be a considerable boost in the month after Hurricane Harvey, which shuttered around one quarter of the nation’s refinery output. Gasoline prices are expected to have risen almost 6 percent sequentially, with an even stronger rise in September. That would leave headline inflation on track to break 2 percent year-on-year by October.

Meanwhile, core inflation is expected to have returned to a 0.2 percent sequential print though unfavourable base effects leave the year-on-year rate lower at 1.6 percent. August gains are expected to be greatly driven by rebound in hotel prices, which drop in the prior two months.

Moreover, some further stabilization in core goods prices, led by apparel and presaged by higher import prices, along with stable strength in OER and rents should drive the rebound and counter a likely persistent drag from past categories of weakness, namely vehicle prices and wireless services. However, risks are tilted to the downside as the uncertain retail landscape implies scope for more disappointment ahead.

At 22:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bearish at -74.9523. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest