Dollar softens as traders brace for key US inflation release

Economic Calendar & Events
Written By Óhran Ó Dubhthaigh

The dollar steadied but drifted lower into the morning as traders awaited the day’s main economic release — the US Consumer Price Index. Treasury yields held steady and equities hovered near highs. With inflation in focus, forex pairs saw cautious positioning. Today’s calendar is heavy on CPI and Fed speakers, and the USD’s path hinges on these numbers.

Quick Summary

  • US CPI release due at 08:30 ET, consensus +0.2% MoM. BLS

  • Dollar index trades near 97.9, softer into data. Bloomberg

  • EUR/USD holds near 1.097, USD/JPY steady at 145.2. Investing.com

  • 10-year Treasury at 4.1%, 2-year at 4.4%. Investing.com

  • Fed speakers scheduled: Jefferson and Barr later today. Fed.gov

Today’s Economic Calendar
The headline event is the August CPI release at 08:30 ET. Markets expect a 0.2% month-on-month rise, with core also at 0.2%. Year-on-year headline CPI is projected at 3.1%, down from 3.2%. Core CPI is seen steady at 3.6%. Last month’s print showed a softer core but firmer headline due to energy prices. Retail traders will also note weekly jobless claims at 08:30 ET, with consensus at 228k vs 227k prior. Two Fed officials — Vice Chair Philip Jefferson and Governor Michael Barr — are speaking later in the day, which could reinforce or challenge market expectations of a November rate cut.


Market Reactions
Ahead of the CPI, the dollar index was last near 97.9 at 04:00 ET. EUR/USD traded at 1.097, up around 25 pips from yesterday’s close. USD/JPY sat at 145.2, virtually unchanged. Sterling at 1.281 gained 15 pips. Treasury yields barely moved, with the 10-year at 4.1% (down 1 bp) and the 2-year at 4.4% (flat). Equity futures were steady, with S&P futures up 0.2%.

Prediction & Forward Outlook
Analysis: If headline and core CPI print in line, the dollar likely stays capped under 98. A softer print opens a path to 97.3 on DXY, while a hotter print revives upside toward 98.6. In my view, the Fed is looking through short-term noise and wants confirmation of trend before cutting. That keeps rates steady but keeps the dollar on the defensive unless inflation surprises.

Key Levels to Watch

  • DXY: support at 97.3, resistance at 98.6

  • EUR/USD: support 1.093, resistance 1.102

  • USD/JPY: 144.8 support, 146 resistance

  • CPI release at 08:30 ET is the inflection point

FAQ
What time is CPI released today?
At 08:30 ET, with consensus at +0.2% MoM headline and core. BLS

How is the dollar trading before CPI?
The DXY is around 97.9, slightly softer, with EUR/USD near 1.097. Bloomberg

Which Fed officials are speaking today?
Vice Chair Jefferson and Governor Barr, later this afternoon. Fed.gov

Related Articles

Sources

Bureau of Labor Statistics https://www.bls.gov/news.release/cpi.nr0.htm
Bloomberg https://www.bloomberg.com/quote/DXY:CUR
Reuters https://www.reuters.com/markets/
Investing.com https://www.investing.com/rates-bonds/u.s.-government-bonds
Federal Reserve https://www.federalreserve.gov/newsevents/calendar.htm

Disclaimer
This information is for educational purposes only and is not investment advice.

Óhran Ó Dubhthaigh

Óhran covers the Economic Calendar & Events, delivering precise breakdowns of the data releases and policy moves that drive dollar markets. With a background in financial research and an eye for numbers, he specializes in distilling complex events — from inflation reports to central bank meetings — into actionable insights. His reporting emphasizes accuracy, clarity, and context, with sourcing from official outlets like Fed.gov, BLS, and Reuters.

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