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US DOLLAR TESTS FOR SUPPORT WITH RISK APPETITE RETURNING

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  • The US Dollar trades near pivotal levels on Thursday. 
  • Markets are easing back earlier rate cuts and channel back to June or May. 
  • The US Dollar Index could dip to 104 before finding ample support. 

The US Dollar (USD) is further trimming its weekly gains, which got booked on Tuesday in the aftermath of the red hot inflation report. Several analysts and economists were quick to write off the report as a one-off, with even US Federal Reserve member Austan Goolsbee saying that markets should not take into account only this Consumer Price Index (CPI) number. The disinflationary pathway to rate cuts is still very much intact and a cut is on the horizon.

On the economic data front,there is  a chunky batch of data with all eyes on Retail Sales. Next to that some lighter data in the form of Industrial Production and Import/Export Prices that could give more support to this idea that disinflation is still there and the recent CPI was just a blip on the radar. To round it all off,  Fed member Christopher Waller will speak at the end of this Thursday


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