CIBC Research discusses the USD outlook into the US CPI report on Tuesday, and thinks that we could get another sign that inflation isn’t picking up as quickly as it seemed in January.
"Our call for 0.1% increases in headline and core CPI a little below consensus expectations.
We’ve already seen wage growth cooling a little, and core CPI could also look tamer this week. With much of the acceleration in January due to strength in areas that are often volatile, a return to average could see only a modest 0.1% gain in February.
That could see markets paring those more aggressive expectations for Fed hikes, seeing the US$ give back even more of its recent rebound," CIBC argues.