News & analysis

Inflation was the word on everyone’s lips this week, with underlying indicators flashing warning signs while US inflation data printed well above expectations. FX price action this week saw fresh highs in EURUSD and GBPUSD, although both currency pairs failed to see out the week at these levels. Meanwhile, USDCAD hit a fresh six-year low after the CPI release, but similar to the euro and pound the loonie failed to finish the week close to its recent highs. Given the attention placed on inflation globally and in the US, we take a look at what drove the rise in the CPI data and what implications this has for the Federal Reserve, and in turn, our USD outlook. Next week (17th -21st May), the focus will be on the latest FOMC meeting minutes, central bank speakers, eurozone and Canadian CPI and preliminary PMI data for May.

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