As the North American session gets underway, the US dollar is trading higher against the major currency pairs.
In the video, I take a technical look at the roadmap for the three major pairs — EURUSD, USDJPY, and GBPUSD — as traders position ahead of the key US CPI report at 8:30 AM ET
The dollar is currently higher by 0.36% versus the euro, 0.27% against the Japanese yen, and 0.62% versus the British pound. The stronger dollar tone comes as traders balance rising geopolitical tensions, higher oil prices, and expectations for inflation data that could influence the Fed outlook going forward. For the CPI report, expectations are for core CPI ex-food and energy to rise by 0.3% month-over-month, while the headline reading is expected to increase by 0.6%, largely due to the sharp rise in energy prices.
On a year-over-year basis, forecasts are for core CPI at 2.7% and headline inflation at 3.7%. The data will be a key catalyst for yields, the dollar, and overall risk sentiment. Fundamentally, markets remain focused on developments surrounding the war in Iran after President Trump rejected Iran’s response to a proposed ceasefire agreement, calling the response unacceptable and signaling frustration with the negotiations.