Futures plummet, dollar rises after CPI data
Euro/dollar chart in 1 minute intervals
Stock futures fell after a stronger-than-expected inflation report stoked expectations for an aggressive rate hike by the Federal Reserve. The dollar rose along with bond yields. The consumer price index rose 9.1% from a year ago, the biggest gain since late 1981, Labor Department data showed on Wednesday. The widely used indicator of inflation rose 1.3% month-on-month, the highest since 2005, reflecting higher gas, housing and food prices.
The Bloomberg dollar spot index climbed to a session high, while the euro fell to parity with the US dollar following June US CPI data. BBDXY +0.3% to 1295.99, up third day; this is an all-time high of 1298.11 reached in March 2020.
Euro falls 0.3% to 1.0004/USD. Major emerging market currencies such as MXN, BRL and ZAR turned into losses after the release of data from the US.
Ahead of the CPI report, money markets were betting that the Fed would raise interest rates by three-quarters of a percentage point this month. Officials raised the target ranging from 1.5% to 1.75% in June, the biggest increase since 1994. Fed Chairman Jerome Powell said that when politicians meet on July 26-27, a move of either 50 or 75 basis points will be discussed.