We're abotu 20 minutes away from the US CPI report and the dollar is just off the worst levels of the day. One view is that the crowded dollar trade is thinning and traders are nervous about an imminent decline in inflation.
Another view is that European governments are taking on the losses of the energy crisis, leaving consumers and businesses less vulnerable. That's a view I shared with Agence France-Presse yesterday and continue to believe it's the underlying driver.
In any case, it won't be the driver at the bottom of the hour and the CPI could trigger some big moves. I wrote a trading preview for the CPI report here. The big question is whether to focus on headline or core.
