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Australia’s Inflation appears to have left the building for today’s CPI report. With headline data points missing expectations and moving further away from the target band, rate cut-calls are likely on the rise.

Whilst Australian employment held up, it doesn’t let inflation off the hook as a weak print tomorrow could see rate cut calls resurface.

The British pound was the weakest major currency yesterday on the back of reports that there was no agreement on a customs union between Labour and Conservatives. It fell further this morning in reaction to the latest consumer inflation data.

The major FX pairs further extended their losses earlier this morning, before rebounding to turn green on the day as North American participants slowly made their way to their trading stations.

After a turbulent session on Wall Street in the previous session, Asian markets and European bourses rose on Friday. US futures are also pointing to a stronger start to trading on the opening bell and a rally into the year end after a particularly volatile couple of months.

As far as the US CPI is concerned, this will be the last piece of major news before the Federal Reserve’s rate decision next week. So, unless it shows a surprisingly strong or surprisingly weak reading, it is unlikely to have any meaningful impact on the decision of the FOMC when it comes to monetary policy.

It’s a day of dispersion in the global FX market, with European currencies rising against the greenback and commodity dollars losing ground versus the world’s reserve currency.

The week has gotten off to a slow start in terms of impactful economic data, and the dearth of scheduled releases will carry over through tomorrow’s trade as well. That said, the latter half of the week should be more interesting for FX traders, starting with Wednesday’s Bank of Canada meeting.

Risk assets saw a respite from the relentless selling pressure in overnight trade as US stock market futures turned higher, but that rally may prove to be short-lived.

The CPI miss is not a game changer by any means, despite the immediate negative dollar reaction.

Risk remains out of favour following yesterday’s big drop in global stock markets. In FX markets, the US dollar has fallen further thanks to slightly lower US bond yields after President Donald Trump shockingly announced that the Federal Reserve was making a "mistake" and described the path of rate hikes as being "crazy."

The pound got another shot in the arm after the latest measure of consumer inflation was released this morning, which revealed a surprisingly strong reading for the month of August.