U.S. headline inflation likely to have accelerated slightly in July

U.S. headline consumer price inflation for the month of July is set to be released tomorrow. According to a Wells Fargo research report, the consumer price inflation is likely to have accelerated slightly on a sequential basis. In June, consumer price was slightly weaker than expectations amid a pullback in energy prices and subdued rise in core services.

“We expect to see the CPI advance 0.2 percent in July, however, as gasoline prices fell less than usual for this time of year. That should keep headline CPI up 2.9 percent on a year-ago basis. We estimate the non-seasonally adjusted index rising to 252.238”, noted Wells Fargo.

Core inflation is also likely to have risen, but is expected to be closely in line with its recent trend and print a low 0.2 percent. The index was dragged down in June by a sharp fall in hotel costs, which is unlikely to be repeated to the same degree. In the meantime, homeownership costs, which account for almost a quarter of the CPI, show no signs of slowing. Prices for new and used autos are also strengthening as inventories have come down in the past year.

At 20:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 107.758. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex