Key Moments:

• Annual US CPI fell to 2.3% in April, missing expectations of 2.4%.
• Core CPI held steady year-over-year at 2.8%, the lowest level in four years.
• The US dollar suffered further declines, with the USD/CHF pair’s rate dropping 0.44%.

Soft Inflation Reading Undershoots Forecasts

Consumer prices in the United States rose at a slower pace in April, signaling softer inflationary pressures. The Consumer Price Index (CPI) increased 2.3% year-over-year, down from 2.4% in March, according to data released on May 13th by the US Bureau of Labor Statistics. The latest figure came in just below market expectations, as analysts had expected April’s rates to mirror the CPI observed in March.

Headline CPI advanced 0.2% month-over-month, falling short of the projected gain of 0.3%. It should be noted, however, that the figure marked a recovery from March’s headline CPI, which slipped by 0.1%.

Stripping out the more volatile components like food and energy, the core CPI rose 2.8% compared to a year earlier. This figure is identical to March’s annual increase, aligning with analysts’ forecasts. The 2.8% reading also represents the lowest core inflation rate in four years. Month-over-month, core CPI also rose by 0.2%.

The US dollar showed little resilience following the latest inflation data. The dollar index, which measures the performance of the greenback against major peers, dropped by over 30% to reach 101.427. The USD/CHF’s slip was particularly pronounced, as it fell 0.44% to 0.8418.

The above decline follows a recent rally which saw the dollar jump on news of the trade tensions between the US and China easing. Namely, both countries agreed to lower tariffs substantially, although the deal is temporary and is set to last 90 days.