The dollar is currently nearing a two-week low as global markets brace for critical US inflation data that could influence the Federal Reserve's choices. The recent decline in the value of the US dollar has been fueled by lower yields on US Treasury bonds, reflecting the Federal Reserve's more cautious approach to raising interest rates.The dollar …
The dollar is currently nearing a two-week low as global markets brace for critical US inflation data that could influence the Federal Reserve’s choices.
The recent decline in the value of the US dollar has been fueled by lower yields on US Treasury bonds, reflecting the Federal Reserve’s more cautious approach to raising interest rates.
The dollar index is currently around 105, barely above its lowest level since September 25.
Transcripts from the most recent Federal Reserve meeting highlighted divergences in policymakers’ viewpoints, which contributed to the dollar’s poor performance. On the one hand, if inflation falls short of expectations, it would lend credence to the notion that the Federal Reserve’s tightening cycle has ended, putting pressure on both US Treasury bond yields and the dollar. An unanticipated increase in inflation, on the other hand, might fuel anticipation of additional interest rate hikes.
In contrast, the market’s rising momentum is weakening, exposing it vulnerable to a potential short-term correction.
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