Today the key data of the week is published: the report on the United States Consumer Price Index (CPI). The economists of MUFG Bank analyze how inflation figures could affect the US dollar (USD).
Limited room for dollar weakness
A good inflation data today will be enough to stop the rise in yields in the short term, but a much weaker CPI would be needed to cause a deeper drop in yields that would weaken the Dollar.
A rate cut in March looks like a lost cause, but if CPI is too weak, May will be back in play. However, with the ECB yet to completely rule out a cut in April, we see limited room for dollar weakness.
A high CPI seems more likely to cause a further dollar move higher, as a cut in May would be further called into question..
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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