By Van Ha Trinh, Financial Markets Strategist at Exness
The dollar was stable on Wednesday ahead of the latest US inflation data release. Higher oil prices could continue to fuel concerns that inflationary pressures could prove more persistent than previously expected, pushing Treasury yields higher across the curve. The 10-year yield climbed above 4.16%, reflecting growing caution that the Federal Reserve may need to maintain a cautious stance for longer.
Expectations moved toward only one rate cut later this year, and another in the middle of next year. A more cautious approach from investors and the Federal Reserve could continue to push Treasury yields higher, supporting the dollar.
Attention now turns to today’s CPI report, which is expected to show a monthly increase of around 0.2% for core prices and 0.3% for the headline figure. Any deviation from these expectations could significantly reshape monetary policy expectations for 2026, triggering volatility in both currency and bond markets.
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