The US dollar has broken through the key resistance, it failed to cross since March so far. Riskier assets are dipping. Let’s discuss it in detail.
Will the USD drop on lower CPI?
The American monthly CPI will be released at 15:30 MT on January 14
The Consumer Price Index is an important reflection of the domestic inflation process. If the basket of goods costs more for customers, in means that inflation is rising. In this case, the financial authorities will have to impose higher interest rates to stop the prices from going over the top. The last two months referring to the months of October and November have shown a downtrend in this indicator for the US, implying a more dovish financial note and indicating that the American economy has been cooling down. If the December indicator expected for release on January 14 shows the continuation of this tendency, the USD may fall.
- If the CPI is higher than expected, the USD will rise;
- If the CPI is lower than expected, the USD will fall.
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