Economists at MUFG Bank analyze how the US Dollar tends to perform after the release of the CPI report.
There is scope for downside surprises
The Dollar tends to perform poorly in the immediate period after the CPI data. In a six-hour period following the data, the USD has weakened in eight of the last ten months of CPI data releases with the data weaker than expected or in line with expectations in seven of those ten months.
The hurdle for a surprise to the downside is becoming lower in the core readings given the sharp declines in headline CPI will soon be behind us and we believe there is scope for downside surprises given those sharp falls in headline inevitably feed into underlying inflation. If that were to be evident today we would expect further falls in US rates and the Dollar albeit less than what we expected a few days ago given the Dollar selling of late.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.