US CPI Today at 13:30 BST: How Inflation Could Move the US Dollar and Exchange Rates

Key Highlight

US inflation data will set the tone for the markets today.

The US Consumer Price Index is released at 13:30 BST and is expected to drive currency movements. Markets have already priced in the possibility of higher inflation, meaning a result that meets or falls below expectations could put greater pressure on the US dollar than a stronger reading would provide support.

The US dollar remains favoured against the euro.

While the outlook continues to point towards further dollar strength, today's inflation data introduces greater short-term uncertainty. The broader trend remains positive for the dollar, but volatility around the release is likely.

Market Recap

Demand for the US dollar increased as investors sought safe haven assets following renewed conflict between the United States and Iran and the collapse of a temporary ceasefire. Sterling recorded its largest daily fall in almost four weeks, increasing the cost of purchasing US dollars for businesses with upcoming payments.

Further support for the dollar came from Federal Reserve Governor Christopher Waller, who warned that persistent inflation could require another interest rate increase in the near future. He stressed that delaying policy action, as occurred in 2021, is not a mistake the Federal Reserve should repeat.

The euro also weakened against the dollar as both geopolitical tensions and expectations of tighter US monetary policy weighed on the single currency. Businesses purchasing euros saw improved exchange rates, while those buying dollars against the euro faced higher costs.

The Swiss franc was the only major secondary currency to weaken against sterling. This provided savings for businesses purchasing francs, while those selling francs received less in sterling terms.

Market Overview

Today's focus is firmly on the US inflation report at 13:30 BST. Because markets have already anticipated the possibility of a stronger inflation reading and further Federal Reserve action, there may be limited upside for the US dollar if inflation exceeds expectations. However, an inflation figure that matches forecasts or comes in lower than expected could trigger a broader dollar pullback as investors reassess interest rate expectations.

EURUSD

The outlook continues to favour a stronger US dollar over the euro. Higher US interest rates, stronger economic performance and expectations that the Federal Reserve will remain more hawkish than the European Central Bank continue to support the dollar over the medium term.

In the short term, however, today's inflation release increases the risk of volatility. A weaker than expected inflation reading could prompt a correction in the dollar, while a stronger reading may have a more limited impact as much of that expectation is already reflected in current market pricing.

For businesses with euro or US dollar exposure, today's data could create significant movement in exchange rates and affect the cost of international payments.

GBPUSD

Sterling remains under pressure against the US dollar, supported by expectations that US interest rates could stay higher for longer. However, recent dollar rallies linked to geopolitical developments have faded quickly, suggesting markets are becoming less reactive unless tensions escalate significantly.

With UK and US short term interest rate expectations now closely aligned, the outlook for this currency pair is more balanced than recent price action suggests. Today's inflation figures are therefore likely to be the main driver of direction.

GBPEUR

There is currently no clear directional bias for sterling against the euro. While the UK's interest rate outlook continues to offer some support to sterling, recent market sentiment has favoured the euro during periods of heightened uncertainty.

Until economic data or central bank expectations provide a clearer signal, this currency pair is likely to remain driven by changing market sentiment rather than a strong fundamental trend.

Bottom Line

The US dollar continues to hold the strongest underlying outlook, particularly against the euro. However, today's US inflation report represents a significant risk event. With much of the positive dollar outlook already priced into markets, there is greater potential for disappointment if inflation meets or falls below expectations. Businesses with upcoming international payments should be aware that exchange rates could move sharply following the data release this afternoon.

14th July 2026

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