Forex Top Movers: The Dollar rules on CPI; EUR/USD the big loser

FXStreet (San Francisco) - The US Dollar is rising across the board as investors digested the US CPI data as a hint that prices will be closer to Fed's target sooner and the central bank will have to hike rates.

The US inflation declined 0.7% MoM, while it was 0.1% down yearly on January. However, inflation ex energy and food rose 0.2% on the monthly basis, and it remained at 1.6% on year over year basis. Market expected a 0.1% increase in core prices in January.

Taken that gasoline prices declined around 18% last month, investors assumed that with a moderation on oil prices the inflation will return to the Fed's target sooner than expected. Meaning that deflation will be short lived and the central bank will be pressured to hike rates soon.

So, USD is rallying while US stocks are trading down on the day. Obviously, WTI oil prices are falling with the barrel losing almost all yesterday's gains; now at $49.50.

Nine out of ten biggest winner of the day are USD crosses related, with the EUR/USD being the biggest loser: -1.35% to test the 1.1200 area. A member of the Live Analysis Room commented earlier in the day: "It's been widely speculated by the big Central Banks and retail traders that EUR/USD will hit 1.1000 to 1.0900; so don't be surprised if the pair hit those limits."

Top winners of the day are: USD/CZK, +1.82% to 24.562; USD/NOK, +1.43% to 7.6496; USD/PLN, +1.12% to 3.7010. To the downside, losers are: EUR/USD, -1.35% to 1.1205; EUR/JPY, -1.05% to 133.64; USD/RUB, -0.97% to 60.78.

On majors: GBP/USD is -0.77% to 1.5408; USD/JPY is +0.29% to 119.25; USD/CAD is +0.54% to trade above 1.2500.