US Dollar Trading Lower Ahead of US Consumer Price Index (CPI) Report
The US Dollar is experiencing a downward trend against major currencies as the market eagerly anticipates the release of the US Consumer Price Index (CPI) report. In light of this upcoming inflation data, economists at Scotiabank provide insights into the outlook for the greenback.
Potential Softening in Headline Gains
The data is expected to reveal a slight decline in headline inflation, which may put downward pressure on the US Dollar following the gains observed yesterday. Market participants are meticulously evaluating any evidence that could potentially influence the Federal Reserve's decision-making process prior to tomorrow's announcement.
While there is a prevailing notion of a 'hawkish skip' in the market sentiment, the extent of USD selling is likely to be limited for the time being. Nevertheless, the broader decline in the USD, which has been ongoing since its peak in late May, is showing signs of further continuation.