DXY: CPI report can be a binary risk – OCBC

FXStreetAug 12, 2025 8:18 AM

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US Dollar (USD) traded a touch firmer overnight, but the moves were well within recent range. DXY was last at 98.50 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Sideways trading in the interim

"Range-bound trade suggests that markets see little risk-reward in pre-positioning for trades ahead of a major data release. US CPI (830pm SGT) is potentially shaping up to be a binary event risk. Consensus looks for core CPI to print 3% y/y. Softer than expected US CPI may even tip markets to price in some chance of 50bp Fed cut in Sep. This can drag USD lower."

"But the USD risk going higher if CPI comes in much hotter-than-expected, reflecting tariff passthrough effects. This week, we hear from Fed’s Barkin, Schmid and Goolsbee (on a few separate occasions spread over Tuesday to Thursday)."

"On data, apart from US CPI tonight, Thu has PPI while Fri has retail sales and inflation expectations. Data releases this week and Fedspeaks may shape expectations on the trajectory of Fed cut. Daily momentum and RSI indicators are not showing a clear bias. Sideways trading in the interim. Support here at 98 levels, 97.20. Resistance at 99.40 (100 DMA), 100 levels."

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