Today sees the release of the December US Consumer Price Index (CPI). The last two soft releases were the foundation for the fourth quarter rally in risk assets and today's release should determine whether this year's rally – and the decline in the Dollar – continue, economists at ING report.

CPI to press play/pause on the rally

“A number in line with consensus probably allows the risk rally to continue.”

Expectations of a Fed easing cycle in the second half of the year, China reopening and lower energy prices are all encouraging this reallocation towards risk and should today's CPI number oblige, DXY could make a move towards the 102 area.” 

“Any upside surprise in the number could see DXY bounce to the 104.00/104.25 area, but we doubt it would completely spell the end for the better risk/softer Dollar environment.”

See – US CPI Preview: Forecasts from 10 major banks, price pressures to ease further