ING: Weak U.S. inflation data shouldn’t mean continued dollar decline

In a note, ING analyst Chris Turner said U.S. inflation data due tonight is expected to fuel expectations that the Fed may not raise interest rates further, but that should not be enough to keep the dollar on the back foot.

Both headline and core inflation are expected to rise 0.2% month-on-month in July, “in line with inflation moving closer to the Fed’s 2% target,” Turner said, although headline CPI is expected to rise on an annualized basis.

Stronger-than-expected U.S. economic activity data could: “Keep the Fed on longer alert”.