All Eyes on U.S. Inflation as Dollar Slips
All eyes are on the U.S. this afternoon as traders await fresh inflation data that could shape the Federal Reserve’s next move. The March CPI report lands at 12:30 GMT, with expectations pointing to a slight monthly rise. Markets are on edge after the Fed’s recent meeting minutes signalled officials remain uneasy about inflation staying sticky. Meanwhile, gold has jumped to a fresh high, oil prices continue to retreat, and the U.S. dollar is losing ground across the board.
Key Events – Wednesday, April 10
- U.S. CPI (12:30 GMT):
- CPI MoM: Expected at 0.1% (prev. 0.2%)
- CPI YoY: Expected at 2.6% (prev. 2.8%)
- Core CPI YoY: Seen easing to 3.0%
This report will be crucial for rate expectations. A softer print could revive bets on a summer rate cut, while anything hotter could fuel another dollar rebound.
- U.S. Jobless Claims:
Initial claims expected at 223K, a modest rise from 219K. - Fed Speakers:
No fewer than five Federal Reserve officials are on the calendar today, including Logan, Bowman, Goolsbee, and Harker, all expected to give remarks after the CPI print. - RBA Governor Bullock Speech:
Australia’s central bank head spoke earlier, striking a cautious tone on inflation risks. The Aussie dollar responded positively.
Commodities
- Crude Oil:
- WTI: $62.11 (-0.39%)
- Brent: $65.14 (-0.51%)
Oil is struggling to find support, with prices sliding for a second week. Demand concerns and the fallout from U.S. tariffs on China are keeping pressure on crude.
- Gold:
- $3,121.41 (+1.14%)
Gold continues to rally, pushing above $3,120 per ounce. It’s up nearly 19% year-to-date, as investors move to hedge against volatility and sticky inflation.
- $3,121.41 (+1.14%)
- Silver:
- $31.24 (+1.04%)
Silver is also catching a bid, climbing alongside gold and benefiting from inflation hedging.
- $31.24 (+1.04%)
Currency Movements
- EUR/USD – The euro is trading higher at 1.0977, up 0.25%, as investors move away from the dollar ahead of the CPI data. The EUR/USD pair is eyeing a push above 1.10 if the report comes in soft.
- GBP/USD – Sterling is also firmer, with GBP/USD up 0.29% to 1.2854. The pound is riding the broader dollar weakness, though it remains capped by weak UK growth expectations.
- AUD/USD – The Australian dollar is up 0.73% at 0.6196, getting a lift from Governor Bullock’s remarks and a modest bounce in commodity prices. The AUD/USD pair could gain further if risk appetite improves.
- NZD/USD – The kiwi has risen nearly 1%, with NZD/USD at 0.5701. Like the Aussie, it’s responding to a weaker dollar and better risk tone, though still down for the month.
- USD/JPY – The dollar is slipping against the yen, with USD/JPY down 0.52% at 146.95. Risk-off flows and lower yields are favouring the yen, which continues to strengthen in defensive trades.
- USD/CHF – The Swiss franc is gaining as well, with USD/CHF down 0.33% to 0.8546. The pair has now fallen over 5.8% YTD, driven by safe-haven demand and lower U.S. yields.
- USD/CAD – The loonie is little changed, with USD/CAD down 0.09% at 1.4069. Weak oil prices are limiting upside for the Canadian dollar.
- USD/MXN – The Mexican peso is under modest pressure, with USD/MXN up 0.21% to 20.29. Volatility remains elevated across EM FX.
- USD/INR – The Indian rupee is stable, trading at 86.22, while the USD/INR pair is drifting sideways ahead of U.S. data.
- USD/CNY – The yuan is holding steady, with USD/CNY at 7.3470, reflecting a cautious tone as traders digest macro risks and China’s muted economic signals.
Market Outlook
Today’s CPI report will set the tone. A cooler reading could send the dollar lower and extend the rally in gold, while hotter-than-expected numbers might reignite Fed hawkishness. Either way, markets are poised for a reaction. Expect volatility in FX and equities as traders reposition around inflation, interest rate expectations, and the barrage of Fed speakers later in the day.