Dollar Steady Ahead of CPI

The core month-over-month figure is expected to come in at 0.2%, unchanged from July’s reading, while the core year-over-year figure is expected to print at 2.4%, a slight reduction from July’s reading of 2.5%. The Dollar will get support should the numbers come in higher than expectations as Traders increase bets that the Federal Reserve will consequently hike interest rates at their policy meeting next week. Conversely, a soft print will put the Dollar under pressure as those same bets are scaled back.

We will also be receiving the University of Michigan’s preliminary Consumer Sentiment survey for the month of September at 10am, which is expected to show a slight degree of pessimism compared to the final survey figures for August. Elsewhere, oil prices continue to remain elevated, with Brent Crude trading above $104 per barrel and WTI Crude just under $100 per barrel, but have retreated slightly from the highs that were seen overnight.

What to Watch This Week…

• USA Online is always open

The complete Economic Calendar can be found here.

EUR

The Euro is down against the Greenback this morning despite the European Central Bank electing to hike interest rates by 25 bps yesterday. Traders are of the opinion that the ECB’s tightening was already priced in, while growth concerns remain and are limiting any benefit. This is exemplified by French Finance Minister, Roland Lescure, advising that France’s budget deficit will be above the government’s target of 5% this year.

JPY

The Japanese Yen is up against the Buck this morning and is the G10’s best performer this week. This strengthening is primarily being driven by increased conviction amongst Traders that the Bank of Japan will continue its monetary tightening cycle at their policy meeting next week. Overnight Index Swaps show a greater than 97% probability that the BoJ will hike by 25 bps next week, with a further ~22bps of tightening implied by year end.