- Analytics
- News and Tools
- Market News
- US CPI Preview: Slower inflation should strengthen the ceiling on the USD – Scotiabank
US CPI Preview: Slower inflation should strengthen the ceiling on the USD – Scotiabank
US Dollar (USD) trades mixed in narrow ranges versus majors ahead of the US Consumer Price Index (CPI) report on Tuesday. Economists at Scotiabank analyze Greenback’s outlook.
Flat USD looks to CPI for direction
The DXY is still effectively consolidating its early February push higher but the index was showing some signs of slipping last week. Price action on the day so far suggests the USD continues to pick up support on minor dips generally, with the index well-supported on weakness to the 104.00 area.
Beyond the price signals, the Dollar – still – looks a bit ‘rich’ in terms of short-term fair value (based solely on spreads) and, with US yields unable to extend significantly last week (US 10Y yields capped below the 4.20% area, for example), the potential for the USD to strengthen without the support of firmer data and higher yields looks quite limited at this point.
The USD’s short-term tone hinges largely on the US January CPI report on Tuesday. Slower inflation (which is expected) should strengthen the ceiling on the USD; sticky inflation will push back a bit harder on market pricing which is reluctant to give up in Fed May easing hopes, however, and give the USD a bit of a lift.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
