Dollar Index Steady as Markets Await US Inflation Data

The US Dollar Index (DXY) has been trading in a narrow range as investors await the release of key US inflation data, which is expected to influence the Federal Reserve's next policy move.

As of the latest trading session, the DXY remained largely unchanged, reflecting cautious sentiment across currency markets. The index measures the greenback against a basket of six major currencies and has been range-bound in recent weeks as traders await fresh signals on the trajectory of US interest rates.

The upcoming Consumer Price Index (CPI) report is considered a critical data point for the Federal Reserve's monetary policy path. A higher-than-expected inflation reading could reinforce expectations of prolonged restrictive policy, potentially boosting the dollar. Conversely, a softer print might fuel speculation about rate cuts, which could weigh on the currency.