The annual growth rate of consumer prices in the United States fell below eight percent in October. Inflation is thus the lowest since January this year. In month-on-month terms, prices rose in October at the same rate as in September.
Lowest inflation in eight months
The U.S. annual inflation rate reached 7.7 percent in October, the lowest in eight months. U.S. prices rose 0.4 percent month-on-month, the same pace as in September, the U.S. Department of Labor said.
Bad news for the dollar
Although inflation fell below the eight percent mark contrary to expectations, this was not positive news for the US dollar. The dollar has weakened against all major currencies and has lost more than three percent of its value against the Japanese yen. This is the biggest one-day drop in the dollar against the yen since 2016.
Indeed, the decline in the inflation rate, combined with an increase in the number of jobless claims, is a sign that inflationary pressures in the US are abating, and the Federal Reserve may be able to ease its restrictive policies. The dollar will be a less attractive asset for investors than before, and they will begin to look for more profitable alternatives.
