USD index gains 0.3% ahead of crucial US inflation data release

The US Dollar Index has climbed 0.3% to 103.45 as traders position ahead of next week's critical inflation print, with markets now fully focused on Tuesday's CPI release. EUR/USD retreated 0.2% to 1.0920 as dollar strength weighed on the common currency despite stable Eurozone data. USD/CAD surged 0.4% to 1.4365, extending gains on persistent concerns about potential tariff implementations affecting Canadian exports. The dollar's broad-based strength reflects shifting market expectations for Federal Reserve policy, with traders now pricing only 35 basis points of rate cuts through year-end, down from 50 basis points last month. Technical analysis shows the DXY breaking above the 103.30 resistance level, targeting 103.80 next. Support sits at 103.00. A higher-than-expected CPI reading could propel the index toward 104.00, while disappointing inflation data might trigger a pullback to 102.50.