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Treasury yields, currently near 4.3%, could see sharp moves depending on the PPI outcome. A stronger-than-expected print could push yields higher, strengthening the dollar by delaying Fed rate cut expectations. Conversely, a softer PPI reading may fuel rate-cut bets, weighing on the greenback. Traders anticipate three quarter-point cuts by year-end, with the first expected in June. However, today’s data could reshape those forecasts.
Trade Uncertainty Adds to Market Jitters
The dollar has been supported by trade uncertainty, particularly as President Trump signals potential tariffs on China, Canada, and the EU. This has raised concerns over retaliatory measures that could stoke inflation, complicating the Fed’s policy path.
Recent headlines suggest growing tensions between the U.S. and Europe, with the EU threatening countermeasures on U.S. goods. Such trade risks could increase price pressures and force the Fed to keep rates higher for longer, lending support to the dollar. However, if trade concerns escalate into full-scale disputes, global risk sentiment could deteriorate, leading to shifts in capital flows.
Technical Levels Hold Key to Dollar Direction
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