EUR/USD has been tumbling from the highs as the US bond rout boosts the dollar. Nonetheless, there are four reasons for a bounce at the critical 1.2110
US Dollar Forecast: Climbing Inflation Expectations May Underpin USD 2021-02-06 13:00:00 Daniel Moss, Analyst
US Dollar Fundamental Forecast: Mixed
Climbing inflation expectations may underpin USD against its major counterparts in the short term.
Q4 GDP figures and consumer price growth data for January will be keenly eyed by market participants.
Intensifying Signs of Inflation to Buoy USD
The US Dollar may continue to gain ground against its major counterparts in the near term, as a noticeable pickup in inflation fuels bets that the Federal Reserve may tighten its monetary policy levers sooner than expected.
The Fed’s preferred measure of consumer price growth – the Core Personal Consumption Expenditure (PCE) index – climbed 1.5%YoY in December, exceeding market estimates of a 1.3% print. The ISM manufacturing prices sub-index also surged unexpectedly, rising to 82.1 in January and smashing forecas