The U.S. Dollar Index (DXY) is holding steady around the 108.00 mark as investors anticipate crucial U.S. inflation data amidst Jerome Powell's ongoing congressional testimony. Powell's initial statements were vague, providing no clear indication of forthcoming interest rate cuts. Upcoming inflation expectations suggest a slight rise in the Consumer Price Index (CPI), which may strengthen the U.S. dollar if higher than expected. Conversely, a drop in inflation could renew discussions about potential rate cuts. Additionally, rising U.S. Treasury bond yields indicate the market anticipates sustained high interest rates, further supporting the dollar's stability.
The stability of the U.S. Dollar Index around 108.00 hinges on upcoming inflation data as investors await further guidance from Jerome Powell's testimony on monetary policy.
As inflation expectations are set to rise slightly, a stronger-than-anticipated CPI could reinforce long-term high interest rates, providing support for the U.S. dollar.
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