The US will see the release of the April inflation report today. Economists at ING expect the figures to underpin the Dollar in the near term.

CPI figures come into focus

“Our economist’s call is aligned with consensus: a 0.4% MoM read in core CPI, translating into a marginal deceleration from 5.6% to 5.5%. Headline inflation may stabilise at 5.0% or slightly decelerate to 4.9%.”

“If these are the numbers we see in today’s print, we think the Fed will be allowed to leave the door open to a potential revamp of tightening (even though we think the peak has been reached) and most importantly have some support – also offered by strong jobs data – to keep pushing back against rate cut expectations.”

“All in all, today’s inflation may also contribute to putting a floor under the Dollar in the near term, even though we remain resolutely bearish on the greenback for the second half of the year.”