U.S. import prices rise in January on energy prices, likely to strengthen further in coming months

U.S. import prices increased in January on energy prices, coming in line with consensus expectations. The import prices were up 0.4 percent in sequential terms, consistent with consensus expectations of 0.3 percent. The figure for the December month was upwardly revised a bit to 0.5 percent sequentially from the earlier print of 0.4 percent.

The rise in January was mainly driven by a sharp improvement in imported prices of petroleum products, which rose 5.2 percent sequentially and industrial supplies that was up 2.7 percent. Meanwhile, other commodities’ prices fell. Prices of beverage and food dropped 1.3 percent sequentially, while those of consumer goods excluding autos dropped modestly by 0.1 percent sequentially. Non-petroleum products’ prices remained flat.

On a year-on-year basis, the import prices increased 3.7 percent, whereas nonpetroleum import prices rose 0.3 percent, a rebound from the solid deflationary trend in 2014 and 2015. The recent upward trend implies that the impulse from the strengthening of dollar and the drag from the subdued global import prices has waned. This suggests that import prices are likely to strengthen further in the months ahead, noted Barclays in a research report.

At 5:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 23.2547. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex