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DXY Near Seven-Month Low as US Inflation Data Looms for Fed Clues
The Dollar Index (DXY) recently traded near a seven-month low in Asian markets, pressured by the yen's strength and US Treasury Secretary Scott Bessent's comments. Rising oil prices have renewed inflation concerns, boosting expectations for a Federal…
DXY Pressure From Yen and Inflation Expectations
The Dollar Index (DXY) moved near a seven-month low on Wednesday morning in Asia, reflecting a significant appreciation in the yen. This shift followed US Treasury Secretary Scott Bessent's warning against speculative bets on further yen depreciation, which helped bolster the Japanese currency against the dollar. Concurrently, increasing oil prices have intensified inflation fears, strengthening market expectations for a potential Federal Reserve rate hike.
Recent better-than-expected US Nonfarm Payrolls (NFP) figures have further fueled speculation regarding a September interest rate hike by the Federal Reserve. This comes amidst persistent inflation risks, largely driven by elevated energy prices. The dollar index, which tracks the greenback against a basket of major currencies, was quoted at 98.48, showing a marginal decline for the day.
Upcoming US Inflation Data to Guide Fed Outlook
Market participants are now closely watching upcoming US inflation data this week. These figures are anticipated to offer additional insights into the Federal Reserve's policy direction leading up to its meeting next week. The interplay between strong employment data, rising energy costs, and the Fed's response to inflation will be critical for the dollar's near-term trajectory.
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