Good morning. The Consumer Price Index (CPI) has been tracked in the U.S. since 1913, originally created to measure how World War I was affecting the cost of living.
A century later, it’s still the report that makes currencies, bonds, and traders sweat every month.
-Shaun A, Jonathan Kibbler, Jordon Mellor
MARKETS
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TRADER INSIGHTS
The Week I Only Care About CPI and the ECB
Last week’s jobs report gave traders plenty to chew on, but this week is even sharper.
When CPI and the ECB land in the same 24 hours, you don’t waste energy on side stories. I’ve learned the hard way that the market doesn’t reward scattered focus on weeks like this. Instead, I’m lining up for the prints that actually move the needle.
Here’s what you need to know:
1. U.S. CPI Takes the Spotlight
Core CPI is forecast at 0.3% m/m, headline at 0.3% / 2.9% y/y. A hotter print could spark a dollar rebound and cool Fed cut optimism. A soft number, though, would lock in September’s dovish case and fuel upside for gold and euro. This is the number that resets positioning across the board.
2. ECB Press Conference Will Set the Tone
Rates aren’t expected to move, but Lagarde’s tone is what matters.
Inflation at 2.15% keeps pressure on hawks, but sluggish growth argues for patience. EUR/USD is trapped near 1.10, and whichever way she leans is where the breakout goes.
ECB officials are likely to make an uncontentious judgment on interest rates, even while nervously watching a political crisis raging at the heart of the euro area
— #Bloomberg (#@business)
8:30 PM • Sep 6, 2025
3. Sterling’s Reality Check
U.K. GDP on Friday is expected flat at 0.0%, down from 0.4%. That’s a big deal for a currency already stuck in a wedge. A weak print hands bears momentum toward 1.31, while an upside surprise finally gives bulls a reason to push beyond resistance.
4. U.S. Sentiment Closes the Week
The University of Michigan prints on Friday, covering consumer sentiment and inflation expectations. In a slowing economy, confidence readings matter, weak data here adds fuel to the Fed-cut narrative and drags the dollar.
My Weekly Process
What could work well this week is keeping my playbook simple, CPI, the ECB, and U.K. GDP. Those are the only three events I need to pay attention to, and I’ll be using DXY as my compass for how the majors move around them.
What I expect is straightforward: volatility will peak Thursday into Friday, and the market will likely whip around the CPI release before a real direction shows. That means patience matters more than prediction.
My focus this week is to not overtrade. I’d rather take fewer setups with bigger conviction than scatter myself thin. I’ll be journaling my reactions around the news, not just the results, and reminding myself to wait until the market tips its hand instead of guessing where it’s going.
My Takeaway
This week is all about discipline. I don’t need 10 trades, I just need the patience to line up with the big catalysts: CPI, the ECB, and GDP. The rest is noise. If I can stick to that, I’ll finish the week with clarity and hopefully, with profit.
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FOREX
Currency Strength & Weakness for 8th September
NFP at the end of last week made some changes to the table, although the USD remains unchanged.
That being said we have some key data points coming up this which includes some of the following:
US PPI & CPI figures. A strong jump in inflation could counteract the weaker jobs data, a weaker inflation number would likely compound the USD weakness.
ECB interest rate decision. Forecasts suggest the European Central Bank is likely to keep rates unchanged in this meeting.
GBP GDP. The latest growth figures will come out of the UK with forecasts showing a further decline.
Let’s take a look at what to watch.
GBP: The British pound remains one of the stronger currencies however we are now beginning to see a potential reversal as the currency has moved from a strong +5 down to +4. Stronger than expected retail sales last week left sellers a little dissatisfied, however GDP could bring the data they need to remain short.
CHF: The Swiss Franc continues to remain strong moving from +3 to +4. This is a currency that is trending against most of its weaker counterparts.
EUR: The Euro has reached +3 gaining 2 places, fundamentally the currency is strong and this looks likely to continue if the US begins to see a decline.
Weak Currencies
Strong Currencies
My currency strength meter highlights these currencies as the strongest as of last week:
Looking at the opposite side of the strength meter now, these are the weakest of last week:
CAD: The Canadian dollar is a weak currency at -5 and is where I would like to target for opportunities, so no change here. Oil prices have taken another dip lower and could be a catalyst to continue to short Canadian dollars.
NZD: The New Zealand dollar also remains weak and unchanged on the currency strength meter.
Markets to watch
Based off of the above these are the currency pairs on my trading watchlist:
Bullish | Bearish |
GBPCAD | CADCHF |
GBPNZD | NZDCHF |
EURCAD | |
EURNZD |
Be aware that the GBP could be forming a reversal so upside to GBPCAD or GBPNZD could become limited.
As always this doesn’t mean we just go to these markets and start pressing buttons. We need to add in other factors of confluence. But it’s a start for deeper analysis.
Good luck this week traders. Chat soon.
WATCH
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ANSWER
Answer: Inflation