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Dollar index (USDX) poised to move on CPI report tomorrow

Following earlier comments regarding the upcoming release of US CPI tomorrow here is some detail on what the markets are expecting from that data. The October Consumer Price Index will be released at 1.30pm GMT tomorrow. The consensus forecast is for CPI to have fallen back last month, showing a rise of just 0.1%, down from the rate of 0.4% in September. The core rate is forecast to remain unchanged at 0.3%. The annualised, non core reading is expected to have dropped to 3.3%, from 3.7%. Once again the core rate there is forecast to be unchanged at 4.1%. The dollar and the dollar index (USDX) will certainly react to any surprises, be that a miss on expectations in either direction. Right now the index has been holding just below its 50 day moving average (now at 105.88). The high seen so far today has been set at 105.85. The index closed on Friday at 105.68. The driver for the gains so far today has come entirely from the rebound in the USD/JPY. The overall longer-term trend remains positive, with a number of technical indicators supporting that, but further upside beyond 107.35 has stalled since peaking there on October 3. The index is currently trading around 105.77
 

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