US Dollar Index: What do the Fed path and CPI signal? – Deutsche Bank

The Dollar Index gained 0.51% to close at 102.11 as market attention shifted from robust US payrolls to October CPI and PPI, according to Deutsche Bank’s Jim Reid and team. Although their economists anticipate softer month-on-month inflation readings, missing 2025 index levels mean year-on-year CPI cannot be calculated. Their forecast remains for 25bp Fed rate increases in December and March.

Can data and the Fed sustain Dollar support?

"We move on from payrolls to US inflation as the main macro focus this week, with October CPI tomorrow and PPI on Friday, alongside a busy slate of Fed speakers."

"Our economists expect headline CPI to rise by 0.20% month-on-month, down from 0.65% previously, with core CPI also up 0.20% after 0.33% last time."

"Because October 2025 index levels were not produced during last year’s government shutdown, year-on-year inflation rates cannot be calculated for this release."

"Our economists expect producer prices to rise by 0.20% month-on-month, compared with 0.32% in September, leaving the year-on-year rate broadly steady at 3.1%."

"Our economists continue to expect 25bp rate increases at the December and March FOMC meetings, absent a further material tightening in financial conditions."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)