The US Dollar Index (DXY) registered a gradual correction to near 102.54 as investors ignored China-Taiwan tensions despite the continuation of drilling by the Chinese military around Taiwan Island.

The major trigger that will keep investors busy ahead is the United States Consumer Price Index (CPI) data, which will release on Wednesday. Analysts at TD Securities expect the headline inflation to rise by 0.1% in March, and the core CPI by 0.4%. They see the CPI slowing to 3.6% by the fourth quarter.

Also, the commentary from New York Fed Bank president John C. Williams conveys, Inflation will be around 3.75% this year. He further added that the growth rate will be less than 1% and the Unemployment Rate will gradually rise to 4-4.5%. On banking turmoil, Fed Williams believes that higher rates by the Fed were not the cause of recent banking stress.

On the Eurozone front, investors are awaiting the Retail Sales data for fresh impetus. Monthly Retail Sales (March) are expected to contract by 0.8% vs. an expansion of 0.3% recorded in February. And annual Retail Sales would contract further to 3.5% from a prior contraction of 2.3%.

This might delight the European Central Bank (ECB) but is not sufficient to back a neutral stance for upcoming monetary policy meeting.