The dollar enters a crucial week near an 18-month high. 🔥 Now comes a three-stage inflation test: CPI on Wednesday, PPI on Thursday and import/export prices on Friday, all at 08:30 ET.
Why does the sequence matter? CPI measures pressure on consumers, PPI looks further up the supply chain, while import prices can show how currency moves are passing through into the cost of foreign goods. 📦💵
The key is not to predict the numbers, but to watch whether they tell the same story.
🔥 Hotter inflation: higher yields and stronger Fed tightening expectations could give the dollar another push.
❄️ Softer inflation: pressure on yields could ease, opening the door to a dollar correction and some relief for EUR/USD and gold.
💶 EUR/USD: around 1.1210 after five straight weekly declines. France’s fiscal and political uncertainty adds another headwind for the euro. A hot US inflation sequence could expose recent lows, while softer data may fuel a rebound.
🇯🇵 USD/JPY: around 158.24. US yields remain the key driver, but at these levels the threat of Japanese intervention also deserves attention. Rising yields favour the upside, while falling yields could give the yen room to recover.
🥇 Gold: around $4,185-$4,200. The metal faces a tug-of-war between geopolitical risk and a strong dollar. Watch real yields closely: softer inflation and lower yields could support gold, while renewed rate fears would be a challenge.
🛢️ Oil: Brent is near $103.3 after sliding on hopes of increased Russian supply. But Houthi attacks, tanker incidents and the wider Middle East conflict keep a substantial geopolitical risk premium alive. Another oil surge could feed straight back into the inflation debate.
⚠️ One extra trap: thin Monday liquidity. Japanese markets are closed for a holiday, while the US has a partial holiday. Lower participation can exaggerate FX moves, so check trading hours and liquidity before treating an early breakout as a new trend.
🎯 This week’s question: will consumer prices, producer prices and import costs confirm one inflation story, or send conflicting signals?
Three reports. Four markets. One very sensitive dollar. 👀
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📊 NordFX: Inflation Week — Three Tests for the Dollar was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.