Currency Shifts Ahead of U.S. CPI and Tarif Agreements

Currency markets are holding firm ahead of the key U.S. CPI release and upcoming deadline for U.S.–China tariff decisions. The U.S. dollar index remains anchored near 98.25, with traders awaiting signals that will shape global risk sentiment and cross-border flows. Soft producer price figures from China and muted consumer inflation further subdued volatility—but markets remain nervous that shifts in U.S. or Chinese trade policy could realign capital flows rapidly.

At the same time, the Australian and New Zealand dollars weakened amid speculation of rate adjustments from the Reserve Bank of Australia in response to cooler domestic data and rising unemployment. Emerging market currencies, meanwhile, treaded lightly as trade uncertainty and rate differential dynamics continue to shape capital allocation differently across regions.

Financial strategists are flagging that any announcements regarding the U.S.–China tariff truce beyond mid-month could trigger sharp FX swings. A continuation of existing terms may be perceived as relief, supporting risk currencies; sudden escalation, however, would likely uplift the dollar and drive safe-haven flows. Markets are thus deploying “wait-and-see” positions, maintaining liquidity buffers while closely parsing policy commentary for directional clues.