U.S. August import prices fell 0.2% with export prices down 0.8%, with the latter weaker than expected (the largest decline since January). The 0.1% increase in July import prices was not revised, but the 0.6% June gain was bumped up to 0.7%. The 0.2% increase in July export prices was left unchanged, but June’s 0.8% increase was revised down to 0.7%. On an annual basis, import prices are down 2.2% y/y, versus -3.7% y/y previously. Export prices are down 2.4% y/y For imports, declines were broad-based but led by petroleum prices which declined 2.8% following the prior 3.6% drop, which followed double digit gains since March. Excluding petroleum, import prices were flat versus 0.5% previously. Import prices with Canada slid 0.9% and were down 0.2% with China. As for exports, agriculture prices dropped 3.4% from -0.3% in July (revised from -0.4%). Excluding ag, export prices fell 0.4% from 0.2% (revised from 0.3%). The data are going the wrong way for the Fed hawks.
The dollar was unmoved by the softer export prices, with EURUSD static at 1.1220, USDJPY unmoved near 102.80 and the USDIndex at 95.54. The USDIndex but remains bullish this week having reached, breached and broken the 20 DMA. Resistance is around 95.80 and the 50 DMA and the 96.00 – 96.10 zone and the 200 DMA. The 95.15 – 95.00 levels could now provide near term support.
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