"US Treasury yields stabilized as well after declining yesterday, limiting the pressure on the currency. The 10-year is once again testing the 4% threshold, and traders could remain cautious ahead of Friday's CPI report, which could inject fresh volatility into both bonds and forex markets. A stronger-than-expected print would likely underpin the dollar, while a soft release could renew easing bets."
"While it retreated slightly today against the yen, the greenback could continue to find strength against the Japanese currency if the latter continues to weaken, as investors react to political developments in Tokyo. Markets expect Japan's new Prime Minister, Sanae Takaichi, to pursue expansionary fiscal policies, a scenario that could maintain the downward trend of the yen. US-China trade dynamics remain a critical driver."
The dollar index held steady, consolidating after prior gains while US Treasury yields stabilized following recent declines. The 10-year Treasury note is testing the 4% threshold and markets are cautious ahead of Friday's CPI report, which could increase volatility in bonds and forex. A stronger-than-expected CPI would likely support the dollar; a softer print could revive easing expectations. The dollar may regain strength versus the yen if fiscal expansion is pursued by Japan's new Prime Minister Sanae Takaichi. US-China trade developments and potential US government shutdown resolution continue to influence investor sentiment and risk appetite.
Read at London Business News | Londonlovesbusiness.com
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