The DXY Strength Bias Out Of Recent CPI Prints

On Tuesday February the 13th US CPI inflation data will be announced for the month of January.  Will the recent disinflationary trend be confirmed? The latest US CPI revisions on Friday are considered to be pointing towards a continued fall in US inflation, but how will markets react to Tuesday’s print?

Economists are projecting a forecast of 3.8% for the core and 3% for the headline, both representing a drop. However, watch for a surprise move upwards to catch dollar traders unaware.

This is where Seasonax’s event tool is really handy. Over the last 5 years the DXY has gained 60% of the time over the 2 days following the print. So, will a surprise beat to the upside give the USD a nice nudge higher into the middle of the week?

The major trade risk here is that CPI print misses to the downside and this could give the USD a sharp nudge lower in contrast to the event pattern!

Remember, don’t just trade it Seasonax It!