U.S. headline consumer price inflation likely to have moderated in August

The headline inflation print of the U.S. for the month of August is set to be released tomorrow. According to a TD Economics research report, the consumer price inflation is expected to have moderated to 2.8 percent in the month, reflecting a 0.3 percent sequential gain stimulated by prices of gasoline and a strong core.

Meanwhile, prices of food are expected to have softened, owing to the tariff-induced deceleration in agricultural prices that have negatively impacted producer-level prices. The core inflation, which excludes food and energy, is expected to have come in strongly by 0.2 percent sequentially.

Supporting the solid core readings are likely to be goods prices, held tighter especially by a recovery in apparel and further gains in auto prices. Recent industry analyst reports continue to highlight record higher vehicle prices while gaining momentum in import prices implies scope for high import content products like apparel to record gains.

“As in July we will continue to watch for ongoing tariff impacts from steel/aluminium and those imposed on China, which have not yet been noticeable. Looking ahead we continue to expect headline inflation to slide further into yearend as base effects from gasoline prices dissipate”, added TD Economics.

At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -136.657. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex