DXY: Dollar Index Quietly Extends Three-Day Rise to 105.50. Inflation Looms Next.

Mighty dollar is once again the main character in forex land with little to no resistance on its way to global dominance.

• The US dollar index DXY secured a three-day winning streak on Wednesday, topping 105.50, and is on pace to log its fourth session in the green on Thursday. The index, measuring the dollar’s value against a basket of six rival currencies, has quietly reclaimed its dominance over the forex space as speculators are busy processing streams of mixed economic data.
• That being said, King Dollar’s run might be far from over. The next leg up (or down) hinges on the upcoming inflation data out of the US. Slated for release Wednesday next week, the consumer price index report (CPI) will show whether price pressures continued to rise. If the answer is yes, then markets are in for more pain on the interest rate front. And the news could stir up the forex space.
• Analysts expect inflation for April to stay fairly elevated at 3.5% — the same annual pace of growth as the figure for March. Inflation is the biggest headache to the Federal Reserve. And since the Fed is data-dependent, April’s inflation data will be key to gauging the US central bank’s next step. The recent jobs print hinted at an economic slowdown. Will inflation move in lockstep and help solidify the trend?