Synopsis:

ING anticipates key US economic data releases this week, with October's Consumer Price Index (CPI) and retail sales figures set to influence the US dollar's direction. The meeting between Presidents Joe Biden and Xi Jinping at the APEC conference is also on the radar for potential impacts on market sentiment and the USD.

Key Insights:

1. US CPI Expectations: ING forecasts a flat month-on-month headline CPI for October, potentially bringing the year-on-year rate down to 3.3%. Core CPI is expected to remain firm at around 0.3% MoM/4.1% YoY. This data could result in a neutral outcome for the USD.

2. Retail Sales as a Key Indicator: Wednesday's release of retail sales data could be more impactful, potentially indicating the effects of tighter credit conditions on the US consumer. A softer retail sales figure might negatively influence the USD.

3. Geopolitical Developments: The APEC conference meeting between President Biden and President Xi Jinping will be closely watched. Positive developments or statements from this meeting could enhance market sentiment.

4. USD Trading Range Projection: Given these factors, ING suggests a range-bound week for the dollar. The DXY (Dollar Index) might face difficulty breaking above the 106.00/106.25 level initially and could trend towards recent lows of 105.35/40 towards the week's end, especially as concerns about a potential US government shutdown become more pronounced.

Conclusion:

The upcoming week could be crucial for the USD, with CPI and retail sales data providing fresh insights into the US economy's health. Additionally, geopolitical interactions at the APEC conference could sway market sentiment. ING advises keeping an eye on these developments, predicting a range-bound performance for the dollar with potential for a slight downward trend by week's end.