Forex News Today - May 13, 2026: Denmark CPI rises to 1.40%, GBP/USD falls to 1.3523; Silver surges 16.66%

US inflation accelerating to 3.80% from 3.30% prior has solidified the dollar's dominance, pushing rate-sensitive pairs like EUR/USD and GBP/USD lower as markets price for a persistently hawkish Federal Reserve.

US Inflation Accelerates, Forcing Fed's Hand

The primary market driver was the US Consumer Price Index (CPI), which printed a hotter-than-expected 3.80%, a significant jump from the 3.30% prior reading. This upside surprise complicates the Federal Reserve's path, reinforcing the case for maintaining the current 3.75% policy rate for an extended period. The release immediately widened rate differentials in favor of the dollar against lower-yielding currencies. The market reaction was swift, with EUR/USD falling 0.23% to 1.1738 and GBP/USD declining 0.59% to 1.3523. The data supports the existing net long USD speculative positioning (net 693 contracts), suggesting conviction behind the dollar trade.

JPY Weakness Continues Despite Trade Surplus

In Japan, the Trade Balance registered a surplus of 8.31T. While a positive figure, it did little to support the JPY. The yen's trajectory remains dictated by stark interest rate differentials, with Japan's 0.75% policy rate standing in sharp contrast to the Fed's 3.75%. This gap fuels the carry trade, weighing heavily on the currency. USD/JPY climbed 0.29% to 157.5907, reflecting persistent yen weakness. Speculative positioning underscores this theme, with Commitment of Traders data showing a deeply entrenched net short JPY position of -61,738 contracts.

Elsewhere, Denmark's CPI came in at 1.40%, up from 1.20% previously. While an increase, it remains well below inflation levels in major economies and had no discernible impact on G10 currency markets, with DKK's value primarily managed via its peg to the EUR.

Brazil Inflation Rises, Complicating BCB Easing Path

Emerging market focus was on Brazil, which released two key data points. The headline CPI inflation accelerated to 4.39% from 4.14% prior. This uptick in price pressures, coupled with a tight labor market evidenced by an unemployment rate of 6.10%, presents a challenge for the Banco Central do Brasil (BCB). With a policy rate at a lofty 14.50%, the BCB has been in an easing cycle, but persistent inflation could force a pause or a slower pace of cuts, potentially offering support for the BRL on carry trade appeal.

The risk going forward is that sticky inflation across developed markets forces a collective hawkish repricing, increasing global financial conditions and FX volatility.