US dollar exchange rates regained some ground on Tuesday after US core CPI inflation came in higher than expected at 0.5% on a monthly basis.
This indicated what the Federal Reserve still needs to do to bring down inflation, even if the financial system shows up with signs of stress lately.recovered to the 134.90 resistance level, after it collapsed to the 132.28 support level, amid market concerns about the collapse of US banks.
Shelter was by far the largest component of the rise in inflation, which indicates an easing of the breadth of price pressures. In general, the US dollar fell sharply in the wake of the failure of the Silicon Valley Bank and the market's rapid move to cut interest rate hikes. But the US dollar may find some relief if signs of financial stress start to abate as this would suggest to the Fed that its targeted measures to contain the SVB fallout are working and thus monetary policy would not be required to act as an additional lever.
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