Some downside risks to the Dollar given a potential downside surprise in CPI – ING

Inflation figures carry some downside risks to the Dollar, economists at ING report.

DXY could slip to the 105.20-105.40 area 

The Dollar risks another correction event today as inflation may slow a bit more than expected, even though core stickiness should prevent a major repricing of rate expectations.

We see some downside risks to the Dollar given a potential downside surprise in CPI, and DXY could slip to the 105.20-105.40 area. 

Expect some support mostly coming the way of procyclical currencies, while we remain unconvinced that the Yen can truly benefit from slight tweaks in the US/Fed narrative at this stage.

See – US CPI Preview: Forecasts from seven major banks, still to the high side of the Fed’s target