The US inflation report noted higherthanexpected price rises, triggering a boost to the dollar and a pullback in US major index futures.

The price index for January rose 0.6 to an annual rate of 7.5. The report dashed hopes that the monthly price increase was slowing, as analysts expected a slowdown to 0.4 after Decembers 0.5 jump.

The core index added another 0.6 last month, accelerating to 6.0 yy, the highest level since August 1982.

Thus far, there are few signs of a slowdown in inflation which requires the Fed to take active steps to tighten monetary policy. As might be expected, the strongerthanexpected rise in prices caused a selloff in US equity futures, with the Nasdaq100 losing 2 and the SP500 1.3.

The dollar index immediately gained 0.4. For the dollar, the current inflation report could be the starting point for a new upward momentum as it virtually unleashes the Fed for a highprofile first move with a key rate hike of 50 points in five weeks.

Source FXPro