The US Dollar (USD) raced higher after strong US inflation numbers on Tuesday. Economists at Commerzbank analyze Greenback’s outlook.
The Fed is likely to remain cautious for the time being
The Fed is likely to remain cautious for the time being, regardless of Tuesday’s surprise. Of course, this could change quickly if inflation were to fall more sharply or if the real economy were to get into trouble. But that would require hard data.
And today’s retail sales figures are unlikely to be enough to shake the Fed’s world view. As a result, the USD’s strength could last for a while.
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