The U.S. dollar, as measured by the DXY index, inched higher on Wednesday, up about 0.25% to 104.35 following Tuesday’s selloff instigated by softer-than-forecast U.S. numbers. Nonetheless, the greenback’s advance, likely fueled by a modest rebound in U.S. yields, was limited and unimpressive, with markets continuing to position for a Fed pivot in the not-so-distant future.
Despite today’s moves, the path of least resistance may be lower for the greenback, especially against some of its top peers. The U.S. dollar, as measured by the DXY index, inched higher on Wednesday, up about 0.25% to 104.35 following Tuesday’s selloff instigated by softer-than-forecast U.S. numbers. Nonetheless, the greenback’s advance, likely fueled by a modest rebound in U.S.
yields, was limited and unimpressive, with markets continuing to position for a Fed pivot in the not-so-distant future. By way of context, the October PPI declined by 0.5% m-o-m, significantly below the anticipated 0.1% increase, a sign that price pressures are cooling rapidly in the country. Moving forward, there is scope for the U.S. dollar to extend lower, but to be confident in this assessment, incoming information will need to confirm that is downshifting, and that inflation is on a sustained downward path and heading towards the central bank’s 2.0% target
U.S. Dollar DXY Index Selloff U.S. Yields Fed Pivot Inflation
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