Higher US yields and Fed hawkish signals lift the Dollar, while Nvidia earnings fuel risk sentiment, limiting broader currency gains.
The US Dollar trades at stronger levels as rising US Treasury yields reflect growing expectations for multiple Federal Reserve rate hikes. The 2-year yield has climbed 40bps from last month’s low, driven by energy price shocks and shifting Fed policy signals.
FOMC minutes revealed a gradual hawkish shift, with most members open to rate hikes if inflation persists above 2%. However, Fed staff forecasts still project inflation nearing 2% next year, tempering aggressive tightening bets.
Nvidia’s strong earnings and AI-driven optimism have bolstered global risk sentiment, curbing further Dollar gains despite the Fed’s hawkish tilt.