Forex
Dollar Softens Amid Scaling Back of Rate Hike Expectations
The US Dollar is trading on a softer footing due to scaled-back Federal Reserve rate hike expectations following weaker labor data and a mixed United States Producer Price Index report.
According to MUFG's Lee Hardman, the slowdown in private employment and wage growth in recent months, along with limited evidence of higher energy prices spilling over into core inflation since the US-Iran conflict started, is providing more leeway for the Fed to leave rates on hold.
The ongoing decline in short-term US yields has been a headwind for the US Dollar performance this month, but it has not yet triggered another leg lower after the sell-off at the end of last month.