CPI in focus – Can the Dollar turn lower again?

Frank Walbaum

Important news this week

Wed, 12th, 14:30 CET US Core Consumer Price Index.
Thu, 13th, 08:00 CET UK Gross Domestic Product.
Thu, 13th, 14:30 CET US Producer Price Index.

CPI in focus – Can the Dollar turn lower again?

US inflation data is the main event today. A weaker-than-expected CPI reading could give stocks another boost and potentially push the major indices toward fresh highs. The S&P 500 remains particularly strong, while the Nasdaq is performing well but still has some catching up to do.
The US Dollar is in focus as a softer CPI could reinforce expectations for lower rates and trigger another leg of Dollar weakness. USDCAD already looks vulnerable and could continue lower if the Greenback comes under renewed pressure. The Japanese Yen remains weak, with most JPY pairs trending higher again. That keeps USDJPY in focus, especially with the pair approaching levels where intervention concerns could return.
Gold is testing the important $4,400 resistance zone. A clean breakout could release additional upside momentum, particularly if CPI comes in below expectations and pushes the Dollar lower. Silver could benefit as well. Crypto is the weak spot for now, with Bitcoin and most altcoins struggling to participate in the positive equity momentum.

Market talk

Today's CPI could decide whether the current market trend accelerates or reverses. A soft inflation print would likely support equities and precious metals while weighing on the Dollar. A hotter number could strengthen the Greenback, pressure Gold and Silver at resistance, and potentially trigger profit-taking in stocks. With USDJPY also rising and USDCAD weakening, today's data could create significant moves across the FX market.

Tendencies in the markets

Equities sideways, USD stronger, BTC weak, ETH positive, oil positive, Silver positive, Gold positive, JPY weak.

Author

Frank Walbaum

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