Hotter-than-expected US inflation data and fading hopes for a swift Strait of Hormuz reopening lift the Dollar Index within its 96.00-100.00 range.
The US Dollar (USD) advanced against most major currencies as geopolitical tensions in the Strait of Hormuz persist and expectations grow for a higher April Consumer Price Index (CPI) print. Gasoline prices and a statistical adjustment to owners’ equivalent rent are forecast to push headline inflation to 3.7% year-over-year, up from 3.3% in March, while core CPI is seen rising to 2.7% from 2.6%.
Underlying inflation measures, such as the Cleveland Fed’s 16% trimmed-mean CPI, remain near the Federal Reserve’s 2% target. Analysts note that stabilizing US labor demand and anchored long-term inflation expectations support a Goldilocks macro narrative, reducing stagflation risks. The Dollar Index (DXY) is expected to stay within its 96.00-100.00 range in the coming months.
April CPI data will be released at 8:30am New York time, with markets closely watching for signs of persistent inflationary pressures. The report may influence near-term USD movements but is unlikely to shift the broader range-bound outlook.