The Dollar falls slightly before the publication of the Consumer Price Index (CPI) for December. Shaun Osborne, chief currency strategist at Scotiabank, discusses how US inflation data could affect the dollar.
Markets looking for weak inflation data
Prices and stocks suggest that markets are looking for soft inflation data – a decent bet as recent US inflation data reports have tended to surprise more to the downside relative to market expectations. However, the first move (in response to data) is not always the right one, as we saw with Friday's NFP.
Beyond the CPI data, I still think the broader risks point to some strengthening of the USD in the coming weeks.
Markets are pricing in about 18 basis points of Fed easing in March now. Swaps and yield movements will determine the USD's reaction to inflation data.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
