U.S. Dollar Index Slips Ahead of Key Economic Data
The U.S. dollar index (DXY) slipped to around 101.6 on Monday, extending its recent decline against crosses ahead of key economic data.
The dollar (USD) was mostly softer against the G10 currencies last week. The euro, where the bond tensions escalated, was the notable exception.
USD became more sensitive to changes in the 10-year yield than the two-year, but market analysts say both correlations are much lower than earlier in the year.
Traders said that beyond interest rates, the dollar’s resilience appears partly to reflect the view that it is best positioned to absorb shocks, some of which it helped create.
The greenback rallied sharply against trading pairs, reaching an 18-month high as demand for safe-haven assets rose amid uncertainty in the global commodities market.
Middle East tensions pressured global commodities, with oil prices climbing to $117 per barrel, while US WTI inched near $110 last week. Inflation concerns and AI scrutiny weighed on the stock market, forcing investors to rotate out of risky assets.
Central banks in the Eurozone and Japan are expected to hold rates steady this week, while policymakers in Canada and New Zealand are seen tightening policy amid mounting inflationary pressures.
Investors await US economic releases this week, including Personal Consumption Expenditure inflation data and preliminary third-quarter GDP figures. The market also anticipates earnings reports from major technology companies such as Amazon, Alphabet and Microsoft.
These results could provide fresh insights into the strength of artificial intelligence demand, which has helped support US economic growth. Nigeria’s 10-Year U.S. Dollar Bond Yield Falls 6 bps
