US Dollar Eyes CPI, Liquidity Drain May Boost Knee-Jerk Volatility

Talking Points:

  • G10 FX outlines time Good Friday marketplace closures empty liquidity
  • US Dollar might corner reduce if US CPI falls brief of expectations
  • Thin liquidity conditions might amplify knee-jerk sensitivity threat

The vital currencies noted time in Asian trade as liquidity levels discontinued amid marketplace closures for a Good Friday holiday. Bourses in Australia and Hong Kong were shuttered while a peace in informal news-flow saw markets in mainland China and Japan follow Wall Street lower, charity zero generally novel.

Exchanges have sealed for a week in Europe and North America as well, hinting that OTC marketplace activity might sojourn still from here and into a weekend. The recover of a Mar US CPI news will symbol a brief remit from a silence.

The core on-year acceleration rate is approaching to parasite adult to 2.3 percent, a hair above a trend normal during 2.2 percent. US information outcomes have increasingly underperformed relations to accord forecasts over a past month however, opening a doorway for a downside surprise.

A soothing imitation might undercut Fed rate travel expectations to some extent, weighing on a US Dollar. The border of follow-through might be singular during best however absent a quite thespian flaw from baseline projections.

Still, skinny liquidity can amplify cost swings if something truly eye-catching crosses a wires, be it CPI or an variable title (like a unfortunate soundbite from a White House, for example). That warns of towering knee-jerk sensitivity risk, definition traders would be correct to ensue with caution.

What will expostulate US Dollar trends by June? See a forecast to find out!

Asia Session

US Dollar Eyes CPI, Liquidity Drain May Boost Knee-Jerk Volatility

European Session

No data.

** All times listed in GMT. See a full DailyFX mercantile calendar here.

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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