The US consumer price index rose by 0.4% in August compared to expectations of a 0.3% rise. On an annualized basis, the index rose by 1.9% from 1.7% and better than the expectations of 1.8% rise.
Also, core CPI rose by 0.2% to match expectations, while the index rose by 1.7% on yearly basis, better than expected at 1.6%.
Energy prices rose by 2.8% in August as crude oil prices continued to rise, with gasoline prices surging sharply by 6.3%. However, energy services prices fell for a third month in a row. While food prices rose by 0.1% in August with an annual rise of 1.1%.
There was no significant impact on data from Hurricane Harvey. The services sector outside the energy sector posted a monthly gain of 0.4%, and an annualized increase of 2.5%, and rising service-sector inflation would ease US Fed fears of lower inflation, although the commodity sector remains uncertain.
Following the data, the US dollar rose strongly before easing to the pre-data range, with the USDJPY rising to its highest level since August 4 at 111.03 before returning to trade at 110.50. The dollar index rose to 92.64 before settling at 92.20.
