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Dollar softens as short-term yields slide on weaker US data
MUFG links the move to reduced Fed rate hike expectations after softer labor data and a mixed PPI, even as the Dollar index stays above its 200-day moving average.
The US dollar is trading on a softer footing, with MUFG pointing to a decline in short-term US yields as Fed rate hike expectations cool following weaker labor data and a mixed US Producer Price Index report, according to FXStreet.
Despite the pressure, FXStreet notes the Dollar index remains above its 200-day moving average, while strong US equities, particularly AI-related technology stocks, and robust S&P 500 earnings provide some offset.
FXStreet also highlights that the dollar faces additional weight ahead of the weekend after disappointing US retail sales, which is contributing to market scaling back bets for a September rate hike.
In related moves, FXStreet reports GBP/USD and EUR/USD holding gains, and says gold rebounded as easing expectations for a September Fed hike supported demand.
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