Forex
DBS: Soft Inflation Data Erodes Dollar's Yield Support
The US Dollar is facing a potential shift in its near-term trajectory as recent inflation data comes in softer than expected, according to DBS Bank.
DBS strategists point to the latest inflation figures, which showed a cooling trend, as the key catalyst behind the erosion of yield support for the dollar.
The correlation between the US Dollar Index (DXY) and 10-year Treasury yields has weakened in recent sessions, indicating that the currency is losing its traditional anchor.
The shift in yield dynamics comes at a time when the dollar is already facing headwinds from improving global growth prospects and a recovery in other major currencies.