TD Securities strategists note that a softer United States (US) core Consumer Price Index (CPI) print triggered only modest US Dollar (USD) weakness. They argue the broad USD uptrend remains in place, supported by strong payrolls and geopolitical tensions. They expect US Dollar Index (DXY) to hold near 99.86–100.00 into next week’s FOMC, where Chair Warsh’s guidance could drive the next USD breakout.
Dollar dip seen as temporary
“Consumer price inflation matched consensus expectations in May, with the headline posting another firm increase at 0.5% m/m (0.473% before rounding; TD: 0.48%, consensus: 0.5%) largely owing to the lingering impact from high crude prices (gasoline +7% m/m).”
“The core segment came in softer than expected, rising 0.2% m/m (0.208% before rounding; TD: 0.23%, consensus: 0.3%). As expected, the deceleration in the core was largely the result of normalization…
