☕️ Dollar Dips Ahead of Key U.S. Inflation Report
#market_pulse #currencies
▫️ Dollar vs Euro: The dollar dipped to a one-month low against the euro on Wednesday amid lower Treasury yields. The euro edged up 0.03% to $1.0823 in Asian trading, having earlier reached $1.0828 for the first time since April 10.
▫️ Dollar Index: The U.S. dollar index eased 0.11% to 104.94 after hitting a 1-1/2-week low of 104.92 earlier. Benchmark long-term U.S. Treasury yields edged down to 4.4414%, extending an overnight retreat.
▫️ U.S. Inflation Data: Traders are bracing for Wednesday's U.S. CPI report. Core consumer prices are expected to show a 0.3% month-on-month rise in April, down from 0.4% in March, according to a Reuters poll.
▫️ Market Expectations: Deutsche Bank strategist Alan Ruskin notes that a large upside miss of 0.5% or more could trigger a major repricing of rates and a significant USD surge.
▫️ Fed's Stance: Fed Chair Jerome Powell remains bullish on the U.S. economy, anticipating continued above-trend growth and falling inflation despite recent data.
▫️ Dollar vs Yen: Despite broad dollar weakness, it climbed against the yen, reaching 156.245 yen on Wednesday after hitting 156.80 overnight. Japanese long-term yields remain low at 0.955%, even with the Bank of Japan's hawkish turn.
▫️ Yuan and Antipodean Currencies: The yuan rebounded from a two-week low versus the dollar on reports of a potential plan to ease China's housing glut. The Australian dollar gained 0.32% to $0.6648, and the New Zealand dollar climbed 0.37% to $0.6062.
👀 Key Developments to Watch:
Economic Data: U.S. CPI, EU GDP
▫️ Dollar vs Euro: The dollar dipped to a one-month low against the euro on Wednesday amid lower Treasury yields. The euro edged up 0.03% to $1.0823 in Asian trading, having earlier reached $1.0828 for the first time since April 10.
▫️ Dollar Index: The U.S. dollar index eased 0.11% to 104.94 after hitting a 1-1/2-week low of 104.92 earlier. Benchmark long-term U.S. Treasury yields edged down to 4.4414%, extending an overnight retreat.
▫️ U.S. Inflation Data: Traders are bracing for Wednesday's U.S. CPI report. Core consumer prices are expected to show a 0.3% month-on-month rise in April, down from 0.4% in March, according to a Reuters poll.
▫️ Market Expectations: Deutsche Bank strategist Alan Ruskin notes that a large upside miss of 0.5% or more could trigger a major repricing of rates and a significant USD surge.
▫️ Fed's Stance: Fed Chair Jerome Powell remains bullish on the U.S. economy, anticipating continued above-trend growth and falling inflation despite recent data.
▫️ Dollar vs Yen: Despite broad dollar weakness, it climbed against the yen, reaching 156.245 yen on Wednesday after hitting 156.80 overnight. Japanese long-term yields remain low at 0.955%, even with the Bank of Japan's hawkish turn.
▫️ Yuan and Antipodean Currencies: The yuan rebounded from a two-week low versus the dollar on reports of a potential plan to ease China's housing glut. The Australian dollar gained 0.32% to $0.6648, and the New Zealand dollar climbed 0.37% to $0.6062.
👀 Key Developments to Watch:
Economic Data: U.S. CPI, EU GDP
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