There is some room for a rebound in the USD before the end of the week – ING

FXStreet Insights Team FXStreet

The Dollar has not benefited much from the hotter US CPI figures released on Tuesday. Economists at ING analyze Greenback’s outlook.

Dollar starts to look cheap in the short term

Core CPI rose by a hot 0.4% month-on-month in February, higher than the consensus 0.3%, but the market reaction has been very contained compared to a month ago when inflation surprised by a similar margin. Indeed, the actual whisper number was closer to 0.4%, but that does not make the rally in US equities after the release any less surprising. We think, instead that markets continue to rely quite heavily on Powell’s relatively dovish testimony, which has made rate cut expectations arguably stickier.

The hot CPI should warrant a stronger Dollar from these levels, and we think there is a good chance that the USD will find more support in the coming days.

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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