The dollar remains firm; will it test new highs on the back of U.S. CPI data?

The dollar remains firm; will it test new highs on the back of U.S. CPI data?

12.05.2026 New

In the previous day’s U.S. currency trading, the U.S. dollar held firm amid fading hopes for a ceasefire in the Middle East and growing concerns over inflationary pressures driven by rising oil prices. The dollar/yen pair fluctuated within a range of 156.45 to 157.28 before closing near 157.24, with concerns about potential currency intervention by Japanese authorities still lingering.The immediate focus is on whether the pair can hold near 157.00, with resistance likely around 157.30 to 157.50 and support around 156.50 to 156.00. We will be watching today’s U.S. CPI data to see if it provides a clearer direction for the U.S. dollar.

European currencies were weighed down by the US dollar’s resilience, causing the euro to trade with some resistance on the upside against the dollar. The EUR/USD pair traded within a range of 1.1748 to 1.1792 before closing near 1.1779.Resistance near the 1.1800 level is likely to be a key concern, while on the downside, the focus will be on whether the 1.1750 to 1.1720 range acts as support. With the release of the German and Eurozone ZEW economic sentiment surveys scheduled for today, we will be watching to see if the outlook for the European economy provides support for the euro.

Today's economic indicators include the revised German April Consumer Price Index (CPI) at 3:00 PM,the Swiss April Producer Price Index (PPI) at 15:30, the Eurozone May ZEW Economic Sentiment Survey and the German May ZEW Economic Sentiment Survey at 18:00, the U.S. April Consumer Price Index (CPI) at 21:30, and the U.S. April Monthly Budget Balance at 27:00.U.S. CPI is expected to rise to 0.6% month-over-month and 3.7% year-over-year, while core CPI is forecast to increase by 0.3% month-over-month and 2.7% year-over-year. U.S. inflation data is particularly likely to influence U.S. interest rate expectations during New York trading hours, so we will closely monitor the reactions of the U.S. dollar, the euro, and the yen.