The US dollar has edged lower, breaking through 108.50. We are now in the (fairly wide) vacuum zone to 107.20. It does look like we are finding support just above 107.20. It is expected that CPI today at 8:30 AM EST will suggest that inflation is plateauing, therefore the Fed can ease their hawkish rhetoric. Easier monetary policy would hit the dollar hard, as its been benefiting from higher yields this quarter. If we can rally, 108.50 will be a target, if we reject current levels 107.20 should provide support.
Comment:
US inflation data came it hotter than expected, at 8.3%. This suggests more hawkish Fed rhetoric and a higher chance for a 75bps rate hike at the end of this month.
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