Forex Today: Markets Awaiting US CPI, Expecting 2.9%

Markets are now looking ahead to the release of US inflation data in the shape of CPI numbers.

1. There's a big event in the Forex calendar due today: the release of US inflation (CPI) data, following yesterday's notably lower PPI numbers which showed a decline of 0.1% month-on-month when an increase of 0.3% was expected. For CPI, a month-on-month increase of 0.3% is expected in both Core CPI and overall CPI, which would see the annualized rate rise from 2.7% to 2.9%. If the number is higher than expected, that will probably boost the US Dollar and sink US stock markets and Gold. If lower than expected, the opposite will be likely to happen. Currently, the CME FedWatch tool shows a 70% chance of at least 3 rate cuts over the remainder of 2025.
2. Yesterday saw strong bullish movement in the US stock market, with both the broad S&P 500 Index and the tech-based NASDAQ 100 Index printing new record high prices. However, the market gave up much of its gain by the New York close, and there has been a further (small) decline during the Asian session. Trend traders will still be interested in being long here.
3. Gold and Silver are looking less bullish, with each showing the start of bearish price action after failing to make new highs over the past couple of days. It looks like both are in for a further decline, although that is likely to depend upon the US CPI data which will be released later.
4. The European Central Bank will be holding a policy meeting today. The Bank is strongly expected to maintain its Main Refinancing Rate at 2.15%.
5. The Forex market has been very quiet, with prices hardly changed over today's Tokyo session,
6. There will be a release of US Unemployment Claims today.