USD gains against majors, particularly JPY, as Fed hawkishness and geopolitical tensions counterbalance weaker CPI and PPI prints.
The US dollar rebounded from earlier weekly losses, supported by persistent inflation concerns and a hawkish Federal Reserve outlook. Despite softer US CPI and PPI reports, yields remain elevated, underpinning the greenback’s strength, especially against the Japanese yen (USD/JPY).
Market focus has shifted back to inflation risks and geopolitical developments, including renewed US-Iran tensions. While yields eased slightly today, they remain higher since the start of the month, reinforcing the dollar’s macro backdrop. Tokyo officials continue to monitor USD/JPY closely, with intervention risks still in play.
Broader dollar sentiment now hinges on further geopolitical updates and risk appetite, as a tech selloff—particularly in semiconductors—weighs on markets. Safety flows may sustain the dollar’s support ahead of the weekend, though major currencies have shown limited sensitivity to risk trends this year.