The U.S. Bureau of Labor Statistics will release the Consumer Price Index (CPI) report on Wednesday, 15 May.

The previous four U.S. inflation reports have been worse than expected, and the last one was particularly bad: annual consumer inflation was 3.5% in March, the highest level in six months. Some of this was due to higher fuel prices, but even core inflation, which excludes volatile food and energy, failed to meet expectations for a slowdown and remained at 3.8%. According to surveys, economists expect overall inflation to fall to 3.4% by the end of April, while core inflation will be 3.7%

‘Two chances are possible at the time the report is published, and both are unpleasant. If the forecast is justified, it will indicate rather modest steps in the right direction. In case the indicators deteriorate, the picture will become even more unfavourable,’ said Kar Yong Ang, the Octa broker's financial market analyst. ‘The upshot is that in both cases, we see that the cooling impulse in inflation that we saw for much of last year has come to a halt,’ he added.

With continued weak inflation data, the U.S. dollar still has more strength against other currencies. In addition, from a technical point of view, the dollar index may strengthen. For currency market participants, this means that EURUSD may keep declining in the week of U.S. inflation data publication, with a target of 1.0720–1.0730 or lower.

About Octa

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The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

Octa has also won over 70 awards since its foundation, including the 'Best Educational Broker 2023' award from Global Forex Awards and the 'Best Global Broker Asia 2022' award from International Business Magazine.