Dollar Falls as Disinflation Accelerates, EU Holds Fire on Tariff Retaliation
| Action Insight Mid-Day Report 4-10-25 |
Dollar Falls as Disinflation Accelerates, EU Holds Fire on Tariff Retaliation |
Dollar faced renewed selling pressure in early US session, as markets digested softer-than-expected inflation data. The latest CPI report confirmed that disinflation is regaining traction, with both headline and core inflation easing more than expected in March. This strengthens the case for Fed to resume its rate cut cycle in the coming months. A May rate cut remains unlikely — with Fed fund futures currently pricing in an 84% chance of a hold. Markets are still more confident that a move will come by June, with odds now standing around 78%. If the disinflation trend persists, that expectation could soon become consensus. On the trade front, the mood is notably less tense today. The European Union announced a 90-day suspension of its first wave of retaliatory tariffs, originally planned in response to the US’s 25% steel and aluminum duties. This follows US decision to pause the broad reciprocal tariff for 90 days. European Commission President Ursula von der Leyen emphasized, "We want to give negotiations a chance". But she also made clear that the EU remains ready to act if talks fail. Preparatory work for broader countermeasures remains underway, with all options said to be "on the table.".... |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.0876; (P) 1.0986; (R1) 1.1057; More... Intraday bias in EUR/USD remains neutral first, but focus is immediately on 1.1145 resistance with today's rebound. Firm break there will resume whole rally from 1.0176. Next target is 1.1213/74 key resistance zone next. In case of another retreat, downside should be contained by 38.2% retracement of 1.0176 to 1.1145 at 1.0775 to complete the near term consolidation. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:01 | GBP | RICS Housing Price Balance Mar | 2% | 8% | 11% | | 23:50 | JPY | Bank Lending Y/Y Mar | 2.80% | 3.10% | 3.10% | 3.00% | | 23:50 | JPY | PPI Y/Y Mar | 4.20% | 3.90% | 4.00% | 4.10% | | 01:30 | CNY | CPI M/M Mar | -0.40% | -0.20% | | 01:30 | CNY | CPI Y/Y Mar | -0.10% | 0.10% | -0.70% | | 01:30 | CNY | PPI Y/Y Mar | -2.50% | -2.30% | -2.20% | | 12:30 | CAD | Building Permits M/M Feb | 2.90% | -0.90% | -3.20% | -4.30% | | 12:30 | USD | Initial Jobless Claims (Apr 4) | 223K | 222K | 219K | | 12:30 | USD | CPI M/M Mar | -0.10% | 0.20% | 0.20% | | 12:30 | USD | CPI Y/Y Mar | 2.40% | 2.50% | 2.80% | | 12:30 | USD | CPI Core M/M Mar | 0.10% | 0.30% | 0.20% | | 12:30 | USD | CPI Core Y/Y Mar | 2.80% | 3.00% | 3.10% | | 14:30 | USD | Natural Gas Storage | 60B | 29B |
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