Forecasting the upcoming week: Inflation is the key to the FX market next week

The US Dollar (USD) experienced a lack of directional movement this week due to geopolitical and domestic uncertainties. President Trump continued to threaten military interventions in Iran, although he toned down his rhetoric toward the end of the week, indicating that all options are still on the table. In this context, inflation data is expected to play a crucial role in the market for the upcoming week. Market participants will closely watch how this might affect the value of the dollar. Many economists suggest that if inflation persists, the Federal Reserve may hike interest rates, which could lead to further strength in the USD. Conversely, if inflationary pressures ease, there is a risk of a decline in the dollar. Therefore, a careful trading strategy is essential in this increasingly volatile market environment.