The U.S. dollar has shown relative steadiness, but it remains vulnerable to volatility influenced by the U.S. inflation data release and impending tariffs on Canada and Mexico. The core PCE data, expected to increase modestly by 0.2%, could impact the Federal Reserve's outlook on interest rates, while softer results might prompt increased predictions of rate cuts. Concurrently, U.S. Treasury yields are rising, reflecting traders' anticipation of changing interest rates based on inflation outcomes. Developments related to tariffs may also bolster safe-haven demand for the dollar, affecting market dynamics next week.
The U.S. dollar remains steady, with potential volatility pending U.S. inflation data and tariff developments that could impact market direction.
Core PCE data is projected to rise by 0.2%, but stronger results may support a less dovish Federal Reserve, influencing the dollar's performance.
Soft inflation data is likely to reinforce predictions for rate cuts this year, which would exert downward pressure on the U.S. dollar.
With U.S. Treasury yields above 4.5%, expectations are set to change significantly based on today’s inflation report.
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