US DOLLAR STANDING ITS GROUND DESPITE DISINFLATIONARY BETS THIS TUESDAY

• The US Dollar holds strong ahead of this week’s main event in the form of US CPI numbers. 
• Market expectations are for further disinflation. 
• The US Dollar Index holds above 104 and shows no signs of a breakout yet. 

The US Dollar (USD) is holding strong this Tuesday ahead of US Consumer Price Index (CPI) numbers. Traders are not selling the Greenback just yet ahead of the numbers, which is as to be expected. That expectation arose after Friday when the US Administration revised the calculation method and composition of the inflation baskets and metrics, in order to better reflect the actual price pressures consumers are facing these days. It led to a downward revision of the December inflation print and could mean an undershooting of the current CPI expectations from analysts and economists.

On the economic front, The National Federation of Independent Business (NFIB) is due to release its Index for January ahead of the US Consumer Price Index numbers. CPI numbers themselves are expected around 13:30 GMT and will be market moving, with all eyes on both the Monthly Core and Headline inflation, which are expected to further come down. Any surprise in these numbers could either push back or pull forward rate cut expectations from the US Federal Reserve, away from June where the bulk load of expectations is lying at the moment