Dollar smashes new 20-year highs on hot CPI
Expectations had favored 8.8% CPI year-on-year, this still being the highest reading since the start of the 1980s.
With inflation all but guaranteeing further rate hikes from the Federal Reserve, the mood among risk assets — including crypto — swiftly turned sour.
The knock-on effect of the CPI numbers was also seen in the U.S. dollar. After the release, the U.S. dollar index (DXY) spiked to new twenty-year highs, forcing the euro below parity as a result.
— Holger Zschaepitz (@Schuldensuehner) July 13, 2022
“Only 12 out of the last 110 years had inflation above 9%,” Charles Edwards, CEO of crypto asset manager Capriole, continued.
“If inflation was still calculated the same as it was four decades ago, today’s reading would likely dwarf the others.”
At the time of writing, BTC/USD traded back above $19,000, with volatility set to continue into the start of trading on Wall Street.
ETH price back targeting three figures
Altcoins, already falling in line with BTC prior to the CPI event, also gave up recent gains.
Conspicuous was Ether (ETH), which threatened to go below $1,000 for the first time since June 30.
Other coins in the top ten cryptocurrencies by market cap were down 3%–4% on the day, practically all of the losses coming after the data release.
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