The US Consumer Price Index (CPI) data for May comes out this week. Analysts expect it to be a big inflation bump probably as a result of President Donald Trump’s tariffs. For that reason, analysts are looking for the CPI to show a 2.5% annual inflation rate in May. This bullish forecast is generating some guarded excitement among traders and investors.
As the market digests the CPI report, worries over the economic impact of newly announced tariffs atop existing ones weigh heavy. These tariffs will likely add to growing price pressures, which will more likely set in and change consumer preferences and spending.
With such high-impact inflation data coming, traders are definitely showing a risk-averse side. Gold prices are finding it tough to capitalize on their small intraday gains. They are still trading under important overnight peaks as traders await the CPI report with baited breath.
“Gold price struggles to capitalize on intraday move higher as traders keenly await US CPI report” – source not specified.
Despite this, the US Dollar has remained steady against this positive overtures on US-China trade relationships. This firmness has provided it an amazing toughness as resources positions dig in forward of big anticipated new launch of inflation data.
With a rapidly falling Pound Sterling still under severe pressure in the foreign exchange market. This comes on the heels of a deeply disappointing UK employment report. The pound-dollar exchange rate, or GBP/USD, continues to trade under the 1.3500 level. This trend is a clear sign of momentum as we head toward the US CPI announcement.
“GBP/USD remains offered below 1.3500 ahead of US CPI release” – source not specified.
The EUR/USD currency pair is recovering sharply and approaching 1.1450. Market focus is now squarely focused on next week’s US inflation data.
“EUR/USD recovers toward 1.1450 as focus shifts to US CPI data” – source not specified.
Traders are interested to find out what the CPI report is going to show. They’re hoping to find out just how much Trump’s tariffs are affecting prices in various sectors. Meanwhile, inflation is projected to increase. This is all happening as markets and other actors continue to judge the broader impacts of all these fiscal and monetary policies.
Recently, analysts have noted a partial positive outlook among traders due to the perceived thawing of trade relations. A palpable sense of wariness remains in the market as they await definitive evidence on the direction of inflation.
“US CPI data expected to show May inflation increase amid looming Trump’s tariffs impact” – source not specified.