US inflation likely reached 0.1% yoy in June

The US June consumer prices are scheduled to release today. The rate of inflation is expected to have reached 0.1% yoy in June, says Commerzbank. 

"What sounds like a considerable risk of deflation merely constitutes a measuring problem. Excluding the volatile components of food and energy inflation is likely to have recorded levels of 1.8% - and is therefore barely below the Fed's target of 2%. And the following applies once again: the higher the consumer prices the better for USD, as rising inflation makes rate hikes more likely", according to Commerzbank.

The Fed hesitated for a long time but signalled recently that the first rate hikes can be expected either in September, December or March, unless the situation changed completely again. So far the market is expecting the rate hikes to be implemented at a slow speed. Increased inflation pressure might change this view and support the greenback.