After the release of the latest US inflation report, the DXY index showed significant growth, reaching a high of $104.95. Investors closely monitored the Federal Reserve's next steps following the data.

The surge in US consumer prices in March raised concerns about the Federal Reserve's future decisions. The Consumer Price Index (CPI) rose from 3.2% in February to 3.5% in March, exceeding the expected 3.4%. Core inflation, excluding food and energy prices, increased by 3.8% in March, surpassing the anticipated 3.7%.

The rise in prices of services and energy, along with gasoline prices exceeding $3.6, indicated ongoing inflationary pressures. These developments may prompt the Federal Reserve to modify its timeline for implementing rate cuts.

With strong job numbers and an unemployment rate of 3.8% reported in March, the Fed could adopt a more cautious approach, delaying rate cuts. Consequently, the focus shifts to the European Central Bank (ECB) and its upcoming interest rate decision.

Economists predict that the ECB will maintain interest rates unchanged in the upcoming meeting but may hint at a rate cut in the future. With Eurozone inflation dropping to 2.4% in March, countries like Spain and Italy thriving while Germany and France face challenges, the ECB may consider lowering rates to stimulate growth.

The ECB's decisions are crucial for the DXY index, as the euro is a major component. As the divergence between the Fed and ECB policies continues, the DXY index is likely to see further increases.