US Dollar Trades Defensively Amid Mixed Inflation Data

The US dollar is trading defensively against major currencies as mixed to soft US inflation data leaves it on the defensive. This has led to a broad lift in global risk appetite, with tech stocks rallying and the yen intervention by Japan's Bank of Japan (BoJ) contributing to the trend.

The Canadian economy is expected to have cooled to 0.2% from April's 0.5% pace, but this data is from before Trump's latest round of forced-labour tariffs, which has muddied the outlook. The US dollar index (DXY) sits at 100.27, and gold is trading at $4,054.56.

The BoJ left interest rates unchanged at 1.00%, but board member Hajime Takata dissented, wanting a 25 bp hike. Governor Kazuo Ueda cautioned that officials need to watch upside inflation risks more closely. The US tech stock rally is expected to continue, with the S&P 500 futures pointing to a 0.41% higher open.