U.S. import prices rise stronger than expectations in October

Import prices in the U.S. rose solidly in October. Prices were up 0.5 percent, as compared with consensus expectations of 0.1 percent. Surge in energy and food prices mainly drove the rise in headline print. Import prices excluding the volatile items of food and fuels dropped 0.1 percent. The annual trend in headline import prices picked up momentum at 3.5 percent in October, while the core measures that excludes food and fuel decelerated to 0.7 percent.

“We view today’s report as consistent with modest imported inflation pressures at the core level”, said Barclays in a research report.

Import price pressures from China continue to be modest at -0.1 percent sequentially and rose 0.3 percent year-on-year. There has been some sign that in response to tariffs from the U.S. Chinese companies might be lowering prices in order to stay competitive in the U.S. market. This would be in line with sequential import price patterns recently – import prices from China were rising at a modest rate in early 2018, but began to turn negative since the middle of summer when trade tensions and tariffs intensified, stated Barclays.

At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -40.8885. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex