US Consumer Price Index (CPI) data came in a bit hotter than expected. The Dollar jumped after the release. Economists at ING analyze USD outlook.
The conditions for a higher Dollar this month are surely there
Rate expectations were not moved by slightly hotter-than-expected US CPI, and support for the Dollar has mostly come through the risk-sentiment channel.
The conditions for a higher Dollar this month are surely there, but we have observed numerous indications that markets remain reluctant to make short-term USD bullish positions coexist with the longer-lasting view that US rates will take the Dollar structurally lower by year-end.
The chances of rangebound trading until we receive clearer messages by activity data and the Fed are high.
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