EUR/USD, GBP/USD, DXY Price Forecast: DXY Nears $105, US CPI in Focus

On Wednesday, July 10, German Buba President Nagel’s speeches and Italian Industrial Production data, which showed a 0.5% increase compared to a forecast of 0.0%, impacted the Euro (EUR). Meanwhile, in the UK, speeches from MPC Members Pill and Mann likely affected the British Pound (GBP), with the RICS House Price Balance reporting a decline to -17%, matching previous data.

In the US, Federal Reserve Chair Powell’s testimony was a focal point, along with the Final Wholesale Inventories report showing a consistent 0.6% change.

Events Ahead

On Thursday, July 11, the German Final CPI m/m is expected to remain steady at 0.1%. For the UK, GDP m/m is forecasted at 0.2%, alongside Construction Output at 0.5%, and Industrial Production at 0.3%.

The Goods Trade Balance is expected to narrow to -15.6B from -19.6B. The BOE Credit Conditions Survey and NIESR GDP Estimate, projected at 0.7%, will also be key.

In the US, the focus will be on the Core CPI m/m, expected to remain at 0.2%, and the CPI y/y, anticipated to dip to 3.1% from 3.3%. Unemployment Claims are forecasted at 236K, slightly down from 238K.

The Federal Budget Balance is projected to show a significant improvement, moving from -$347.1B to -$71.2B. The Dollar Index, currently at 104.931, down 0.03%, could face further pressure if the CPI data indicates cooling inflation.

Powell’s cautious tone and potential dovish hints from FOMC members could reinforce a bearish outlook.