Market participants will pay attention to the release today of the latest US CPI report. Economists at MUFG Bank note that only a soft CPI print could derail the dollar’s appreciation trend.

All eyes on US CPI report

“The US CPI report is expected to reveal that both headline and core inflation dropped back towards 8% and 6.0% respectively in April. Market participants will be scrutinizing closely to see if there are any further encouraging signs that inflation pressures are moving closer to peaking out albeit at very elevated levels.” 

“The dollar declined by around -0.3% in the first hour following the release last month of the CPI report for March which showed a softer than expected core inflation reading. Another softer CPI print will be required today to threaten the US dollar’s current bullish trend, and even then it is unlikely to be sufficient on its own to trigger a sustained reversal lower for the US dollar.”

See – US CPI Preview: Forecasts from 12 major banks, the first decelerating print in a long time