Markets are already poised for a CPI print that keeps the U.S. economy at zero or negative inflation for the months ahead. This momentous change could set a powerful precedent for financial environments. Traders have been especially concerned with the effects that U.S.-China trade relations and recent tariffs will have on pricing. While trade talks loom, the U.S. dollar holds firm. Expectations lead to U.S. dollar resilience, supported by trade negotiations optimism.
The forthcoming U.S. CPI report is expected to reveal mild inflation trends, and analysts are keenly assessing how tariff measures have affected prices. “Will US May inflation data highlight tariff impact on prices? – LIVE,” noted FXStreet, emphasizing the importance of this data release for market participants.
With the market still getting ready for CPI to come out with some hawkishness in mind, gold prices are struggling to benefit from bullish drivers. While there was an intraday uptick, traders seem to be opting for caution, biding their time before the all-important CPI report. “Gold price struggles to capitalize on intraday move higher as traders keenly await US CPI report,” stated FXStreet.
EUR/USD is bouncing back, returning at least partly toward 1.1450. Attention now shifts to next week’s inflation data. This rally seems to be short-lived as traders and investors follow a risk-off mood before the release. “EUR/USD recovers toward 1.1450 as focus shifts to US CPI data,” said FXStreet.
The GBP/USD continues its bearish path, unable to regain 1.3500. This drop is being driven by persistent concerns over Friday’s lacklustre UK jobs report. “GBP/USD remains offered below 1.3500 ahead of US CPI release,” noted by FXStreet, underscores the pressure facing the Pound Sterling.
Traders have been far more circumspect. They are strongly cautioning against betting on market movement as a result of the U.S. CPI data. Market expectations indicate that the upcoming CPI report could confirm a trend of stickier inflation, but not much more than that, with little change from previous predictions.