Greenback Remains Under Selling Pressure

Greenback remains under selling Pressure. The US dollar has been under heavy selling pressure in the past few days. The USD Index (DXY) has been breaching the 104.00 key zone for the first time since mid-February. This comes as US yields extend their decline to multi-week lows, with the 10-year Treasury yield dropping on Monday. The markets’ attention remains on the release of the US Consumer Price Index (CPI) on Tuesday, which is expected to increase in March. The CPI data will provide further clues on the US inflation outlook and could have a significant impact on the US dollar in the near term.

The US dollar is likely to remain under pressure in the near term as investors remain cautious ahead of the release of the US CPI data. The US Dollar Index (USDX) has weakened in the past few sessions, trading below the 104.00 level. Investors are re-evaluating their expectations for the next interest rate hike by the Federal Reserve at the March 22 meeting, leading to a decline in the greenback’s value. The mixed results from the non-farm payrolls report last Friday have also contributed to the dollar’s weakening. Tuesday’s release of the Consumer Price Index (CPI) figures for February will likely be the main focus of attention in the US data space. Investors will be closely watching the inflation data to get a better understanding of the Fed’s next move.

What Investors Should Look Out For

Investors looking to gain a better understanding of the US dollar (USD) should pay close attention to the US jobs report and the Federal Reserve’s (Fed) policy decisions. Recently, the US Dollar Index (DXY) has been on a downward trajectory, falling from its 2023 highs in the 106.00 regions. This is mainly due to investors pricing in the likelihood of a 25 basis point rate hike at the March gathering and the results of the US jobs report that continue to weigh on the greenback. Despite the downward trend, it is important to note that inflation remains elevated and the US economy is still resilient. Therefore, investors should be mindful of the Fed’s policy decisions and the US jobs report when making decisions about the USD.

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