The U.S. Bureau of Labor Statistics will release the
Consumer Price Index (CPI) report on Wednesday, 15 May.
The previous four U.S. inflation reports have been
worse than expected, and the last one was particularly bad: annual consumer
inflation was 3.5% in March, the highest level in six months. Some of this was
due to higher fuel prices, but even core inflation, which excludes volatile
food and energy, failed to meet expectations for a slowdown and remained at
3.8%. According to surveys, economists expect overall inflation to fall to 3.4%
by the end of April, while core inflation will be 3.7%
‘Two chances are possible at the time the report is
published, and both are unpleasant. If the forecast is justified, it will
indicate rather modest steps in the right direction. In case the indicators
deteriorate, the picture will become even more unfavourable,’ said Kar Yong
Ang, the Octa broker’s financial market analyst. ‘The upshot is that in both
cases, we see that the cooling impulse in inflation that we saw for much of
last year has come to a halt,’ he added.
With continued weak inflation data, the U.S. dollar
still has more strength against other currencies. In addition, from a technical
point of view, the dollar index may strengthen. For currency market
participants, this means that EURUSD may keep declining in the week of U.S.
inflation data publication, with a target of 1.0720–1.0730 or lower.
About Octa
Octa is an international broker
that has been providing online trading services worldwide since 2011. It offers
commission-free access to financial markets and various services already
utilised by clients from 180 countries with more than 42 million trading accounts.
Free educational webinars, articles, and analytical tools they provide help
clients reach their investment goals.
The
company is involved in a comprehensive network of charitable and humanitarian
initiatives, including the improvement of educational infrastructure and
short-notice relief projects supporting local communities.
Octa
has also won over 70 awards since its foundation, including the ‘Best
Educational Broker 2023’ award from Global Forex Awards and the ‘Best Global
Broker Asia 2022’ award from International Business Magazine.
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