Dollar Index is going nowhere this Monday morning in Asia as the weakness in the treasury yields despite upbeat Q3 GDP reading is keeping the bulls at the bay.
Yield curve flattens
The spread or the difference between the US 10-year yield and the US 2-year yield continues to form lower highs on the daily chart. The spread currently stands at 80.7 basis points vs. Oct. 25 high of 83.7 bps. The narrowing/flattening of the yield curve is USD negative.
Downside capped by Catalan crisis?
The EUR/USD could remain on the back foot, courtesy of Catalan crisis, thus the downside in the DXY could be limited, given the Euro-Dollar pair has the highest weight in the dollar index basket.
Focus on US Core PCE
The Fed's preferred measure of inflation - the core personal consumption expenditure (ps) - is scheduled for release at 12:30 GMT. An uptick in the core PCE could be considered as an evidence that a rise in China's factory-gate prices (PPI) is pushing inflation higher in the US. A better-than-expected data could result in a steeper yield curve and a strong US dollar.
Dollar Index Technical Levels
The index was last seen trading around 94.70. A break below 94.27 (Oct. 6 high) would open doors for 93.99 (100-DMA) and 93.80 (Oct. 18 high). On the higher side, breach of resistance at 95.15 (previous day's high) would expose 95.47 (Jun. 30 low) and 96.00 (zero levels).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
Recommended content
Editors’ Picks
EUR/USD grinds higher toward 1.1700 ahead of German ZEW, US CPI
EUR/USD is picking up bids and approaching 1.1700 in the European session on Tuesday. The pair draws support from a broad US Dollar retreat as traders refrain from placing fresh bets on the Greenback ahead of the US CPI inflation data. German ZEW Survey and Eurozone industrial data are also awaited.
GBP/USD recovers to 1.3450, awaits US CPI for fresh impetus
GBP/USD is on a gradual recovery from three-week lows, testing 1.3450 in Tuesday's European trading. A cautiously optimistic market mood combined with a broadly weaker US Dollar underpins the pair ahead of the critical US CPI data and BoE Governor Bailey's speech.
Gold price retains intraday positive bias; remains close to multi-week top ahead of US CPI
Gold price sticks to modest intraday gains around the $3,360 region heading into the European session and remains close to a three-week high touched the previous day. The US Dollar eases from a multi-week top amid some repositioning trade ahead of the crucial US consumer inflation figures, which is seen as a key factor acting as a tailwind for the commodity.
Top 3 Price Prediction: Bitcoin, Ethereum, Ripple – BTC, ETH and XRP decline as holders realize massive gains
Bitcoin (BTC) price faces a pullback, trading below $108,000 at the time of writing on Tuesday as traders opted to take profits following strong rallies. Ethereum (ETH) and Ripple (XRP) followed BTC’s footsteps, correcting nearly 2% and 3%, respectively, facing rejection from their key levels of $3,000 and $3.
Five fundamentals for the week: Investors eye tariff circus and US inflation data Premium
Which country will be the next to receive a letter from America? US President Donald Trump has been extending his tariff threats through the weekend. Has the US economy felt the consequences of levies already imposed? These are the topics for another hot summer month.
Best Brokers for EUR/USD Trading
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.