The US Dollar (USD) had its worst week since December losing out versus the rest of G10. Economists at ING analyze Greenback’s outlook ahead of the US Consumer Price Index (CPI) report.

CPI report can offer the US Dollar some support

We expect inflation figures to put a stop to the Dollar decline this week. The shifts in FX positioning last week no longer justify an exacerbation in USD downward pressure unless key data starts to turn in favour of Fed easing. 

There is a non-negligible risk that part of the USD losses driven by Fed Chair Powell’s testimony will be unwound this week.