The US will publish its latest consumer price index on Thursday, with the release potentially injecting further volatility into currency markets after a chaotic week.
At the time of writing, the US dollar has managed to rebound from multi-month lows against both the pound and the euro. While USD/EUR remains weak, USD/GBP is trading near a one-month high. GBP/EUR, meanwhile, is at its lowest level since August 2024.
What are the US inflation figures expected to show?
The March CPI figures are expected to show that price pressures cooled last month, with headline inflation easing from 2.8% to 2.6%.
How could this impact the US dollar?
A cooldown would usually undermine USD as it increases the chances of the Federal Reserve cutting interest rates. However, this may help to ease fears of a coming recession, which could be positive for the ‘greenback’.
In the meantime, we have the meeting minutes from the Fed’s previous policy decision. If these highlight worries about the impact of tariffs on the US economy, USD may face fresh selling pressure.
The fallout from Donald Trump’s tariff announcement could also continue to impact markets. With countries considering countermeasures, many investors are bracing for more volatility.
If you’re concerned about the potential for volatility amid the upcoming US CPI and ongoing tariff fallout, get in touch to find out how we can help.