U.S. headline inflation likely to have eased in December on marked fall in energy prices

The U.S. headline inflation data for the month of December is set to release tomorrow. According to a TD Economics research report, the oil prices are expected to have retreated sharply to be reflected on a significant 8.4 percent sequential fall in the consumer price index’s fuels category, more than countering and expected rise in food prices at 0.2 percent sequentially.

“The notable decline in energy prices should have dragged down headline CPI inflation to a negative 0.1 percent m/m print for December, which should also be reflected on a softer 1.9 percent annual increase”, said TD Economics.

Given the stable rise in its core services segment, the core inflation is expected to have recorded their third straight 0.2 percent sequential rise, maintaining annual core rate stable at 2.2 percent.

“Looking ahead, we expect headline CPI inflation to gradually rebound to above-2 percent levels as oil prices stabilize and core CPI inflation maintains its recent steady pace”, added TD Economics.

At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -16.5998. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex