Market comment on behalf of Tito Iakopa – Commercial Director at FlowCommunity
The US Dollar stabilized near a multi-month low, as market participants assessed the latest Consumer Price Index data (CPI) and awaited today’s Producer Price Index (PPI). While core and headline inflation registered a slowdown, a rise in real wages and persistent inflation in essential goods could temper expectations of a looser monetary policy from the central bank, providing temporary support to the greenback.
Meanwhile, US treasury yields remained stable, with the 10-year note trading within a narrow range near 4.3%, as traders took a cautious approach regarding the US economic outlook.
Concerns over President Trump’s protectionist trade policies have dampened consumer confidence, raising risks for US growth. Escalating trade tensions could further weigh on the overall sentiment.
Looking forward, next week’s Federal Reserve decision will be a key driver for the dollar. A dovish stance would likely keep pressure on the greenback, while a more hawkish approach could provide a boost.