- Soft US CPI to weigh on USD near-term, but unlikely to start a long-term trend of sustained selling – Rabobank
Market news
12 July 2023
Soft US CPI to weigh on USD near-term, but unlikely to start a long-term trend of sustained selling – Rabobank
The USD has been on the backfoot ahead of the US CPI inflation report. Economists at Rabobank analyze the greenback’s outlook.
Disinflation?
The headline number is expected at 3.1% YoY, down from the May number of 4.0% YoY. This would be the lowest number since early 2021. While core inflation is stickier, the Bloomberg survey median stands at 5% for the June number down from 5.3% the previous month.
A number in line or below expectations will likely allow EUR/USD to become more comfortable above the 1.10 level in the near-term. However, continued risk of recession in the US suggests that the USD is likely to avoid a strong sell-off on a three-to-six month horizon.
See – US CPI Banks Preview: Inflation to step meaningfully lower in June
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