FX Daily: US price check this week
At a Glance
The desk anticipates that the upcoming US April CPI data will play a crucial role in supporting the dollar, particularly as investor sentiment remains cautious amid geopolitical tensions. Per the full note from ing-think, hopes for a ceasefire between the US and Iran have not materialized, contributing to a 4% rise in oil prices and a slight dip in equities. This backdrop suggests that firm inflation data could reinforce the dollar's strength. With no high-impact events on the calendar in the next 30 days, the focus remains squarely on the CPI release.
Key Takeaways
- 01US CPI data this week is the key FX driver as peace deal hopes fade.
- 02Oil price spike supports USD via higher inflation expectations.
- 03Consensus leans toward firm data keeping the dollar bid.
Full Analysis
What the desk is arguing
Investor hopes for a ceasefire before President Trump's China trip have not materialized, with no signs of conciliation from either the US or Iran. Oil prices surged 4% in Asia, and equities are expected to open lower. Barring a surprise peace deal, the focus this week is on US April CPI data.
Firm US CPI data could keep the dollar bid, supporting the view that the Fed will maintain a hawkish stance. The ING desk implicitly rejects the idea that a ceasefire is imminent or that it would materially shift FX dynamics this week.
Where it sits in our coverage
Our consensus target for EUR/USD is 1.075, with a range of 1.04 to 1.12. This view aligns with the ING outlook, as both see near-term USD strength on firm US data.
Specific firm targets for EUR/USD include: * Barclays: 1.08 by Dec-26 * JPMorgan: 1.10 by Dec-26 * Goldman Sachs: 1.06 by Dec-26
How other firms see it
Barclays and JPMorgan are aligned with the view that USD can stay bid on strong US data, though their targets are slightly different. Goldman Sachs is more bearish on EUR/USD, targeting 1.06, which is contrary to the consensus.
BofA is also contrary, targeting 1.04 by Dec-26, suggesting greater USD strength than the consensus.
Market Implications
Strong US CPI would likely reinforce USD strength across G10, particularly against EUR and JPY. Risk-off could exacerbate moves if equities decline further. Expect higher volatility in USD pairs around the CPI release.
From the original
Investor hopes of a ceasefire deal ahead of President Trump's trip to China have yet to materialise, with few signs of conciliation on core demands from either the US or Iran. Oil prices have gapped up 4% in Asia and equities are called a little lower. Barring a surprise peace de
Related speeches
4 itemsThe Commodities Feed: Oil rises amid shaky start to US-Iran ceasefire
Oil prices are witnessing upward momentum, propelled by a delicate ceasefire between the US and Iran, which faces significant skepticism. Per the full note from ing-think, the US-Iran temporary ceasefire has been fraught with challenges, highlighted by delays in negotiations and heightened rhetoric around the Strait of Hormuz. Notably, the market is reacting to speculators significantly trimming their net long positions in ICE Brent, now at its lowest since December 2025, with shorts entering amid uncertainty. This backdrop provides a complex setting for oil and currency pairs linked to energy prices ahead of potentially volatile developments in the US-Iran talks.
The Commodities Feed: US-Iran peace deal hopes
Lead — The ING Economics commentary suggests that the evolving situation towards a US-Iran peace deal could have substantial implications for the commodities market, particularly impacting oil prices and currency fluctuations in major currencies. Per the full note, optimism surrounding such negotiations is on the rise, potentially mitigating geopolitical risks that have historically influenced oil supply dynamics. In light of this, traders should remain cognizant of the market's receptiveness to any forthcoming developments on this front, especially given that a peace deal could stabilize oil prices and subsequently affect broader FX positions.