No new momentum for USD amid easing inflation – Commerzbank

The US Consumer Price Index is slated for release at 13:30 GMT. Will inflation data move the Dollar? Economists at Commerzbank believe that the report is unlikely to inject new momentum into the US Dollar.

If inflation still were to stand at 7% in six months’ time that would be worrying

“A fall from approx. 9% around the middle of the year to 7% is generally expected for the November data. If inflation still were to stand at 7% in six months’ time that would indeed be worrying. Today, a similar result is unlikely to cause much concern though.”

“It would probably be critical if the data were to show a surprise rise in inflation. It is by no means trivial how the USD would react to higher inflation data. It might be able to appreciate once again if the market were to expect stronger rate hikes. I can also imagine though that the Dollar would depreciate if doubts arise whether the central bank will be able to control inflation at all.”

“The most likely scenario is that inflation has fallen further in November and that as a result there will be no new momentum for the US Dollar.”

See – US CPI Preview: Forecasts from 10 major banks, inflation appears to have peaked