Today's US inflation report will set the Dollar tone for tomorrow's FOMC meeting and into the first quarter of 2023. Economists at ING expect the greenback to strengthen into the first quarter of next year.

Plenty to play for over the next 36 hours

“We think the market is being a little early in pricing 50 bps of rate cuts for 2H23 and could see the Dollar bouncing on any upside surprise in today's CPI data – including upward revisions to last month's reading. The data probably will not be a knock-out blow to the Dollar – one way or the other – given tomorrow's big FOMC meeting including a new set of Dot Plots.”

“A DXY close above its 200-Day Moving Average at 105.80 would be helpful in supporting our view that the Dollar will be strengthening through 1Q23.”

See – US CPI Preview: Forecasts from 10 major banks, inflation appears to have peaked