USD: Multiple upside risks today – ING
The US Dollar (USD) has come back bid – partly on the exceptionally strong US NFIB small business optimism index released yesterday. Perhaps it should be no surprise that US entrepreneurs welcomed the prospect of tax cuts and deregulation next year. At the top of the agenda today is the release of November US CPI, ING’s FX analyst Chris Turner notes.
US CPI to shape the movement
“At the top of the agenda today is the 1430 CET release of November US CPI. While it is tempting to say that the Fed has moved on from the inflation story, any upside surprise to the already high consensus expectation for core inflation at 0.3% month-on-month would likely send the dollar higher.”
“This is because the market now prices an 88% chance of a 25bp Fed rate cut next Wednesday and a high core CPI reading could make it more of a 50:50 proposition.”
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