U.S. headline inflation likely to trend upward steadily, to have remained unchanged in September

U.S. consumer prices are likely to have remained unchanged in September. In the prior month, the headline inflation had come in at 0.2 percent, slightly below market projections. In the last 12 months, consumer prices have eased to 2.7 percent alongside easing energy prices. Core inflation rose modestly by 0.1 percent, but followed a solid reading in July, noted Wells Fargo in a research report.

Core goods prices dropped for the first time in three months, as apparel prices dropped 1.6 percent, indicating renewed downward pressure on core goods prices due to recent appreciation in dollar. Core services inflation weakened in the month to 0.2 percent. Physician services and hospital prices dropped in the month. Nevertheless, costs for housing and transportation had continued to rise.

“We maintain our view that inflation should continue to steadily trend upward. The current inflation environment remains in-line with Fed expectations as core inflation has gradually moved up to the FOMC’s target. However, there is little indication that inflation will accelerate and force the Fed to raise rates sharply”, stated Wells Fargo in a research report.

At 16:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bearish at -78.3804. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex