US CPI Data Did Not Support the Dollar, Euro Continues to Strengthen
The euro rose above $1.21 level today after news that German Chancellor Angela Merkel has made some breakthrough in the formation of a new coalition government. It is reported, that Merkel has entered into a deal with the Social Democrat to officially begin negotiations on reforming the great coalition.
The US dollar did not receive support from data on inflation and retail sales. The consumer price index rose by 0.1% mom and by 2.1% yoy in December. The Core CPI exceeded expectations of growth, and increased by 0.3% mom and 1.8% yoy. In December, retail sales in the US increased by 0.4% mom.