Dollar pushes higher with CPI report due later today

 Dollar pushes higher with CPI report due later today

Dollar pushes higher with CPI report due later today.

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The dollar was pushing higher early today as markets anticipated the release of CPI (Consumer Price Index) figures for October. Data is due later today and investors will look to see where the trend is heading with consumer inflation – it currently hovers around 30-year highs. The Fed has been adamant that inflation is ‘transitory’ but they may be forced into action if inflation continues to climb. Major currency pairs traded in a tight range as they waited for inflation data to come in.

The dollar index was trading slightly higher today, although it was below its Friday peak of 94.645, which was the highest figure for over a year. The greenback is seen as a safe haven and investors may have been moving to it due to a retreat in global stocks and renewed fears of potential contagion from the heavily indebted Chinese property market.

At the FOMC meeting in November, Fed chair Jerome Powell made it clear that the Fed viewed high inflation as being caused by supply bottlenecks and strong demand. He also noted that they see 2% as a viable goal next year. Markets are expecting a slight reduction in yearly CPI to 5.3% from 5.4%, but an unexpected rise could cause increased volatility.

Here’s how major FX pairs were trading at 11:30 pm in anticipation of CPI results:

EUR/USD was trading around 1.1566 as a stronger dollar broke the 3-day uptrend.

GBP/USD was trading at levels of 1.35 extending its recent slide.

USD/JPY was at 113.15 and its last 4 trading days closed in the red.

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