US Dollar at session's low ahead of June's CPI release

NEW YORK (July 11) The US Dollar (USD) starts to move lower substantially for a second day in a row, measured by the US Dollar Index. The Greenback does not have much reason to rally firmly, with uncertainty creeping in its valuation after big names such as Nancy Pelosi and actor George Clooney came out on social media asking for President Joe Biden to drop out of the race and pave the way for a better candidate. It is a big blow for the current ruling President as concerns keep biting away at the polling numbers. 

On the economic front, only one element counts on Thursday: the US Consumer Price Index (CPI) in all its forms and colours. Traders will want to see at least the disinflationary nature of the numbers being confirmed, which should keep markets on track for an interest rate cut in September. Add in the weekly Jobless Claims data, and the US Dollar might be easing a bit further on the back of any upticks in the Jobless numbers. 

Daily digest market movers: CPI around the corner

• At 12:30 GMT, different economic data will be released at the same moment. Let us walk you through the main numbers to focus on:
  • US CPI for June:
    • Monthly headline CPI is expected to tick up marginally by 0.1% from 0.0%.
    • Monthly core CPI should remain stable at 0.2%.
    • Annual headline CPI should increase at a slower pace of 3.1% from 3.3% in May.
    • Annual core CPI is expected to grow steadily at 3.4%.
  • Weekly Jobless Claims for the week of July 5:
    • Initial Claims are expected to head to 236,000 from 238,000.
    • Continuing Claims are seen heading to 1.860 million from 1.858 million.
• At 15:30 GMT, President of Federal Reserve Bank of Atlanta Raphael Bostic participates in a moderated conversation at the NCUA's Diversity, Equity, and Inclusion Summit in Minneapolis, United States.
• Equity markets are gearing up for the next earnings season, which gets underway with earnings from Pepsico and Delta before the opening bell on Thursday. Equities overall are in a good mood with solid gains in Asia and positive returns in Europe, while US futures are lagging a touch. 
• The CME Fedwatch Tool is broadly backing a rate cut in September despite recent comments from Fed officials. The odds now stand at 68.1% for a 25-basis-point cut. A rate pause stands at a 28.6% chance, while a 50-basis-point rate cut has a slim 3.3% possibility. 
• The US 10-year benchmark rate trades at 4.28% and remains near the lower level for the week.

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