Dollar Faces Key Test as US Core CPI Data Arrives Today

Forex markets are closely monitoring today's release of the March Core Consumer Price Index (Core CPI), one of the most influential economic indicators from the U.S. Bureau of Labor Statistics. Scheduled for release at 8:30 AM ET, this report is expected to set the short-term direction of the U.S. dollar and significantly impact currency pairs such as EUR/USD.

What Economists Expect from the CPI Report

Economists anticipate March’s Core CPI to show a 0.3% increase, slightly lower than February’s figure of 0.4%. Last month’s CPI reading exceeded market forecasts, temporarily boosting the strength of the U.S. dollar.

Recent Weakness in the US Dollar

In recent weeks, however, the dollar has shown considerable weakness. The U.S. Dollar Index (DXY) has declined notably, while major currency pairs, particularly EUR/USD, have gained significant ground.

How Today's CPI Could Impact Currency Markets

Should today's CPI reading come in higher than the expected 0.3%, the dollar could regain some strength. Conversely, if the data aligns with or falls short of expectations, the dollar is likely to remain under pressure, potentially fueling further gains in EUR/USD and other major currencies.

Traders are urged to approach this market-moving event with caution, carefully managing risks. Monitoring real-time updates via trading platforms such as Trendo, which allows traders to react immediately to market developments, will be particularly advantageous for short-term trading strategies.