Recent data releases have provided mixed signals, such as, the U.S. Consumer Price Index (CPI) met expectations, with a 0.2% increase month-over-month and a 2.9% year-over-year rise, slightly below the anticipated 3.0%.
These figures have kept the Dollar Index (DXY) relatively flat, currently trading at 102.57. Meanwhile, the UK’s GDP figures came in as expected, with no growth month-over-month and a 0.6% increase quarter-over-quarter, down from the previous 0.7%.
This stagnation suggests that the GBP/USD could face headwinds if economic conditions don’t improve.
Events Ahead
Looking ahead, several critical U.S. economic indicators are on the horizon. Core Retail Sales are expected to rise by 0.4%, while overall Retail Sales are forecasted to grow by 0.4%, up from 0.0% previously. These numbers could lend some strength to the Dollar Index if they meet or exceed expectations.
Additionally, the Unemployment Claims report is forecasted to come in at 236,000, slightly above the previous 233,000, which could indicate some softness in the labour market.
The Empire State Manufacturing Index and the Philly Fed Manufacturing Index will also be closely watched, with forecasts of -5.9 and 5.4, respectively.
Any significant deviations from these expectations could influence both EUR/USD and GBP/USD, as investors adjust their expectations for Federal Reserve policy moves.
