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Dollar Index consolidates as MUFG questions persistent USD debasement

MUFG says prior periods of USD weakness were followed by DXY stabilization and Gold pullbacks, despite fiscal concerns and Treasury buybacks being in focus.

Reported · Written up by our desk · Major Pairs

MUFG analysts Derek Halpenny and Abdul-Ahad Lockhart said the Dollar Index (DXY) is consolidating after a modest rebound, as markets weigh US fiscal concerns, Treasury buybacks, and worries about perceived USD debasement.

They argued that past episodes of USD weakness did not produce sustained Dollar losses. Instead, MUFG pointed to outcomes such as DXY stabilisation and Gold corrections, despite conditions like rising Treasury yields.

FXStreet also noted that the US Dollar recovery has been losing traction, with EUR/USD recovering toward 1.1700 and GBP/USD near 1.3650 during Tuesday’s European session. The dollar’s pullback was attributed in part to renewed hopes for diplomacy related to the Middle East conflict.

Separately, the newsletter highlighted that inflation risks tied to volatile energy prices keep expectations for at least one more US Federal Reserve rate hike on the table, while Gold remained under pressure in the first half of the European session.

Latest closeGold $4,432.00 ▲1.6%|EUR/USD 1.157 ▲0.4%|GBP/USD 1.354 ▲0.3%

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