I’m not a big fan of the dollar index but the chart is in an interesting spot right now. The dollar fell after soft retail sales and it edged below the 61.8% retracement of the sharp gain after CPI.
US dollar index daily
De-aggregating the the dollar moves, the Australian and New Zealand dollars have completely recouped the moves while the struggling pound is still near the lows. The yen is facing its own challenges and the possibility of rate hikes (or not after today’s GDP data) and is volatile. The pair touched 149.50 right after the retail sales data but has quickly bounced to 149.94.
Today’s comments from Waller could go a long way towards determining how important the CPI numbers will be.
Market pricing is now right on 100 bps for the year after falling to 90 bps after CPI.