U.S. import prices likely to rebound modestly

U.S. import prices are likely to have risen in September after falling in August. Prices had fallen 0.6 percent in August after falling 0.1 percent in July. Decreased fuel prices and a firming dollar in 2018 are possibly behind the recent softness in prices. The monthly fall in August was the steepest since January 2016 and mainly occurred due to a 3.9 percent fall in import fuel prices, stated Wells Fargo in a research report.

Nonfuel prices had dropped 0.1 percent on lower industrial supplies and materials and capital goods prices. Export prices also had seen a drop of 0.1 percent. While trade disputes with China continue to increase, tariffs are not included in import prices, as they are applied after. The impact of import prices on consumer prices is also slightly restricted by the fact that most imports are goods and the bulk of consumer spending is services oriented.

“Softer import prices will likely have negligible effects on overall inflation, which continues to trend higher. We anticipate import prices will rebound modestly from their current slump”, added Wells Fargo.

At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bearish at -96.2871. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex