US Dollar Index: CPI and Fed policy trajectory take centre stage – Deutsche Bank

The Dollar Index closed at 102.11, up 0.51%. Deutsche Bank’s Jim Reid and team highlight the gain as markets shift their focus from strong US payrolls to October CPI and PPI. Softer monthly inflation readings are expected by the bank’s economists, but missing 2025 index levels prevent a year-on-year CPI calculation. Their forecast remains for Fed rate increases of 25bp in December and March.

US Data and Fed Outlook Support Dollar

"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.)