USDInd holds steady ahead of US CPI release

• US dollar index remains stable at 108 after falling below 21 and 50 SMAs
   
• Investors anticipate January's CPI data, expecting a slight increase in core inflation
   
• The YoY inflation is forecast to decline from 3.2% to 3.1%
   
• Jerome Powell emphasized the Fed's caution on interest rate cuts, citing inflation concerns
   
• Markets currently expect two rate cuts in 2025, while assessing tariff impacts

USDInd holds steady around 108 after falling below both 21 and 50 SMAs in the previous session, as market sentiment remained cautious ahead of a key inflation report due later today (Feb 12).
 

Investors are now focusing on January's CPI data, which is expected to reveal:

• A small increase in U.S. core inflation to 0.3% from 0.2% MoM
   
• A slight decline to 3.1% from 3.2% YoY

Fed Chairman Jerome Powell reiterated in testimony to Congress that the central bank is in no rush to cut interest rates, citing the strength of the economy and ongoing inflation.

At the time of writing, markets were pricing in 2 rate cuts this year.

He warned that a rapid policy shift could hinder inflation control, while slow action could hamper economic growth. In addition, markets are still assessing the impact of President Trump's latest tariff decision.