Fed, BoE, BoJ Face Inflation Test as Markets Reprice Rate Paths

The US dollar advanced this week, supported by escalating geopolitical risks in the Middle East and President Trump's decision to impose another round of tariffs on top of existing levies. The greenback gained across the board as risk appetite waned.

Looking ahead, market focus turns to inflation readings from the US, UK, and Japan. The Federal Reserve, Bank of England, and Bank of Japan are all contending with price pressures that could alter the trajectory of interest rates. Investors will parse the data for clues on the timing and magnitude of potential rate moves.

Central bank communications amid these inflation tests will be critical for currency markets in the week ahead.