The US inflation expectationsaccording to the 10-year and 5-year inflation rates of the Federal Reserve of St. Louis (FRED), justify the latest market preference for the Dollar, since the first signs of price pressures in the US are firm lately.
That being said, the 10-year FRED indicator extends Friday’s rebound to 2.23%the highest level since the beginning of May, while its 5-year counterpart continues to move higher to a one-week high of 2.22% at the end of the North American trading session on Monday.
Given encouraging US Treasury yields and recently firmer inflation signals, the US Dollar Index (DXY) remains above 101.00 despite staying near year-to-date lows .
However, the caution before the publication this week of the US Consumer Price Index (CPI) encourages buyers of dollars. Imminent fears of a US default and the Fed’s moderate interest rate hike could be along the same lines, not to mention the mixed signals from Non-Farm Payrolls (NFP).
Above all, a light calendar and cautious mood ahead of key US data, as well as market consolidation after a volatile week, challenge the dollar’s moves of late, even if the inflation tracks are positive for prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
