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Market Update: CPI set to break USD deadlock?

September 14, 2021
by Joseph Jeffriess, Market Analyst

Hi, traders, today we’re looking at the USD index as price remains in a stalemate with US CPI data to come later today.

Today traders are waiting to see US m/m CPI data, and it’s expected to come in at 0.4%. If we see that figure year-on-year will be at 5.4% – the same pace it was in July.

All CPI data is being watched at the moment and this data could influence or set the tone for the Feds meeting next week. If today’s data comes in hot, there are concerns it could push the Fed to bring forward its timetable on tapering.

This all draws into the chart below. We can see the USD index remains rangebound looking for direction. Inflation and tapering could be the biggest factor for the USD currently. Hot data today could influence the Fed meeting next week with talk of fast-forwarding tapering. This could have a positive influence lifting the USD out of its consolidation with a break higher. That could reignite the overall uptrend.

Disappointing data could maintain the outlook or extend in for tapering and put downward pressure on the USD, potentially setting off a new break lower.

US CPI is due at 08:30 am ET or 10:30 pm local AEST. CPI is expected at 0.4% and Core CPI at 0.3%

Daily DXY USD Index

All times are AEST.