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US December CPI Preview: EUR/USD and USD/JPY are pairs to watch

Is the market wrong on US inflation?
Is the market wrong on US inflation
  • Annual CPI in the US is forecast to decline to 6.5% in December.
  • Markets remain optimistic about a policy pivot despite hawkish Fed commentary.
  • EUR/USD and USD/JPY are likely to react significantly to inflation data. 

The US Dollar Index has been moving in a downtrend since early October with investors anticipating a less aggressive policy tightening by the Fed in light of soft inflation readings. On Thursday, January 12, the US Bureau of Labor Statistics will release the Consumer Price Index (CPI . . .

Written by Paul Hough