Alexander Kuptsikevich
FxPro Financial Services Limited
The US dollar is nearly in free fall. The primary reason is the sell-off in US bonds, which has not spared even short-term securities that typically serve as a safe haven. The anti-dollar sentiment is fuelled by the weak inflation data released over the past few days.
Consumer prices for March decreased by 0.1%, and the annual rate of inflation fell to 2.4%, compared to expectations of an increase of 0.1% and 2.5%, respectively. Friday's producer price figures were even more divergent from expectations. The overall price index dropped by 0.4% against an anticipated increase of 0.2%. Annual inflation slowed from 3.2% to 2.7%, in contrast to average forecasts predicting an acceleration to 3.3%.
The slowdown in inflation formally removes the barrier to lowering interest rates. However, this is only feasible if one relies solely on firm past data. The situation becomes much more complicated when considering expectations.
Preliminary estimates from the University of Michigan revealed a disturbing rise in Americans' inflation expectations. The projected rate of price growth one year from now is estimated at 6.7%, and for five years, 4.4%. This represents an undeniable record for the one-year rate and is close to the peak for five-year expectations (4.6% in 1990). This is compounded by the sentiment index's drop to 50.8, the second-worst reading in history since 1978. The expectations index was also at historically low levels, being worse only briefly in 1980.
Trade Responsibly. CFDs and Spread Betting are complex instruments and come with a high risk of losing money rapidly due to leverage. 77.37% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider. The Analysts' opinions are for informational purposes only and should not be considered as a recommendation or trading advice.
Recommended Content
Editors’ Picks
Gold falls amid a possible de-escalation of US-China tensions Premium
Gold pulled back from its all-time high of $3,500 per troy ounce reached earlier on Tuesday, as a resurgent US Dollar and signs of easing tensions in the US–China trade dispute appeared to draw sellers back into the market.
EUR/USD retreats to daily lows near 1.1440
EUR/USD loses the grip and retreats to the 1.1440 zone as the Greenback’s rebound now gathers extra steam, particulalry after some positive headlines pointing to mitigating trade concerns on the US-China front on Tuesday.
GBP/USD deflates to weekly lows near 1.3350
GBP/USD loses further momentum and recedes to the 1.3350 zone on Tuesday, or two-day troughs, all in response to the frmer tone in the US Dollar and encouraging news from the US-China trade scenario.
3% of Bitcoin supply in control of firms with BTC on balance sheets: The good, bad and ugly
Bitcoin disappointed traders with lackluster performance in 2025, hitting the $100,000 milestone and consolidating under the milestone thereafter. Bitcoin rallied past $88,000 early on Monday, the dominant token eyes the $90,000 level.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.