The US dollar's stability could be challenged as traders anticipate critical inflation reports. Weaker economic indicators have increased speculation about potential policy easing. Expectations for a September rate cut have been bolstered by higher jobless claims and lower July NFP figures. Fed Governor Bowman indicated that three rate cuts may be necessary this year due to a declining labor market. US Treasury yields are close to recent lows amid dovish monetary policy expectations, with future inflation data potentially impacting market dynamics.
Weaker-than-expected economic data have fueled market bets on policy easing, with higher jobless claims and a weaker July NFP reinforcing expectations for a September rate cut.
Fed Governor Bowman stated that three cuts are likely appropriate this year, citing a weakening labor market as outweighing inflation risks, aligning with market expectations.
A softer CPI could raise interest rate cut expectations and deepen the dollar's weakness, while a surprise to the upside may trigger a short-term rebound.
US Treasury yields remained near their recent lows despite a small rebound as monetary policy expectations continue to lean toward a dovish stance.
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