The U.S. dollar rallied vigorously on Wednesday, fueled by hotter-than-expected U.S. inflation numbers – an upswing that propelled USD/JPY to a fresh 2024 peak and its highest level since June 1990.

In the dynamic realm of forex trading, emerging market currency pairs have garnered significant attention in recent years for their unique blend of volatility and potential returns.

The broad surprise in US CPI data has jolted FX markets ahead of the ECB meeting. Markets have downgraded expectations of Fed cuts, weighing on EUR/USD. EUR/GBP lower

US inflation came in above forecast in March, sending the US dollar sharply higher, as US rate cut expectations are pared back further.

The precious metal remains bid and in record high territory, underpinned by ongoing fears in the Middle East. Today’s US inflation data may hamper further progress.

Wednesday’s U.S. inflation report has the potential to cause significant volatility, so traders should prepare for the possibility of treacherous market conditions, especially if the incoming data surprises to the upside.