Bitcoin Tests Dollar Strength Before September CPI, Fed Meeting

Bitcoin faces a test from a stronger U.S. dollar and incoming inflation data before the Federal Reserve’s Oct. 27–28 policy meeting.

The U.S. Dollar Index (DXY) closed at 102.43 on Monday, up from 101.45 at the end of September. The index measures the dollar against a basket of major currencies.

The Bureau of Labor Statistics is scheduled to release September’s Consumer Price Index on Oct. 14 at 8:30 a.m. ET (12:30 p.m. UTC). The report will arrive less than two weeks before the Fed’s next meeting.

A stronger-than-expected inflation reading could reinforce expectations for restrictive monetary policy and support the dollar. That would potentially weigh on Bitcoin and other risk assets. A softer reading could ease pressure on interest rates and improve sentiment toward crypto markets.

Bitcoin rose in September even as the dollar gained. The simultaneous gains show that the usual inverse relationship between the two markets can weaken, but the figures do not establish that the dollar’s move caused Bitcoin’s performance.

The Fed raised its federal funds target range by 25 basis points in September to 3.75%–4%. The September CPI report will provide another data point as markets assess the central bank’s policy outlook.

The next concrete event is the CPI release on Oct. 14, followed by the Fed’s policy meeting on Oct. 27–28.