Markets brace for July US CPI release, with annual inflation expected to ease to 3.4% from 3.5% in June.
Investors are holding back on major positions ahead of the US July Consumer Price Index (CPI) data, which could drive volatility in currency markets. The US Dollar (USD) remains resilient, trading marginally higher but below the 100.00 mark in early European trading on Wednesday.
Markets anticipate annual CPI inflation will soften to 3.4% in July from 3.3% in June, while monthly core CPI is expected to rise by 0.2%. Analysts note that a core CPI print of 0.3% or higher could shift Federal Reserve policy expectations, potentially lifting rate hike bets for September.
US stock index futures show little change after Wall Street closed lower on Tuesday. The cautious sentiment has kept the USD supported, though analysts predict a rangebound trend unless data surprises materially.