• The US Dollar trades flat at 104.00, with stakes being high for the Greenback ahead of the release of the March inflation data.
• Traders see this US CPI print for March as key to gauge the chances of a Fed policy pivot this year.    
• The US Dollar Index orbits around 104.00 and could move substantially in either direction. 

The US Dollar (USD) trades broadly unchanged on Wednesday as the Greenback faces one of its most crucial moments of 2024 so far. With the release of the US Consumer Price Index (CPI) data for March, markets will finally get some idea on whether the US Federal Reserve (Fed) is right on the money or is facing one of its biggest policy mistakes in decades. Whatever the outcome, this is the only moment ahead of the US presidential elections for the US Dollar Index to finally snap out of that 5% range which is keeping the DXY chained for 2024 thus far. 

Some additional insights reveal that markets are tilted to a decline, which fits with the narrative in the CME Fedwatch Tool, which points that markets are still pricing in a few interest-rate cuts this year.  Headline monthly inflation is expected to fall to 0.3% in March from 0.4% in February, with the survey ranging between 0.5% on the upside and 0.2% on the downside. Core monthly inflation is also expected to come in at 0.3% from 0.4%, with the topside expectation at 0.4% and the downside at 0.2%. Any print below the lowest expectation could see ample US Dollar weakness, while any figure above the highest expectation will mean a repricing in the number of rate cuts, likely leading to substantial US Dollar strength.