Downside surprise for core inflation to trigger a deeper USD sell-off – MUFG
The release today of the latest US Consumer Price Index (CPI) for October could prove pivotal for the US Dollar in the near-term especially as it is currently threatening to break lower. A downside surprise could trigger a deeper sell-off, economists at MUFG Bank report.
All eyes on the US CPI report
“Market participants will be closely scrutinizing today’s report to see if there is any evidence that underlying pressures are beginning to ease as well given that the headline rate has already peaked back in June at just over 9%.”
“The Bloomberg consensus though is looking for the third consecutive firmer core inflation reading of around 0.5% MoM which is roughly in line with the year-to-date trend.”
“We continue to believe that the USD could prove more sensitive to downside surprise for core inflation triggering a deeper sell-off, while another firm reading would offer some much-needed support right now.”
See – US CPI Preview: Forecasts from 13 major banks, inflation coming down only slowly
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FXStreet Insights Team
FXStreet
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