The exchange rate of the single currency rose against the dollar to the level of 1.1815.
Overall inflation in the US rose by 0.3% on a monthly basis, which is slightly lower than the forecast of 0.4%. Core inflation increased by an even more modest 0.1%. According to forecasts, an increase of 0.3% was expected. Mild inflation contributed to a moderate weakening of the US dollar. But economists believe that this effect has limitations, since the established ranges are likely to remain at the Fed meeting next week. Inflation in the US fell from 5.4% to a still high level of 5.3% in 12 months. The decline in the base indicator in annual terms reached 4% from 4.3%. Given the current supply problems and rising labor costs, there is no reason for a significant decrease in inflation until the second quarter of 2022. The risk is that rising inflation expectations remain at a high level. Consequently, the assumption remains that the Fed will quickly reduce the volume of the asset purchase program until the second quarter and may start raising interest rates from the end of 2022. Thus, a slight decrease in the US inflation rate in August will have almost no effect on the markets in the long term.
The forecast assumes a decline in the euro/dollar exchange rate to the levels of 1.1800, 1.1770 and 1.1750.