Mitsubishi UFJ analyst Lee Hardman said if Tuesday’s data show US June core
inflation remains moderate, the dollar could weaken. Markets will watch
second-round pass-through from recent energy price rises; since the US-Iran
conflict began core inflation has only edged higher. If core inflation stays
moderate and energy inflation eases, market participants are likely to scale
back expectations for further Fed rate hikes, constraining dollar strength over
the week ahead.
