The rate picture is muddled. The 2-year U.S. Treasury yield edged lower while longer-term yields moved slightly higher. Lower short-term yields reduce the return on U.S. assets and that weighs on the dollar. Traders are also waiting on jobless claims. A strong number keeps rate cut expectations in check and gives the dollar some support. A weak one does the opposite.
Jerome Powell is dealing with political pressure and that’s adding another layer of uncertainty. When the Fed’s independence gets questioned, confidence in U.S. policy direction takes a hit. The dollar feels that.
Euro and Pound Holding Near Recent Highs
The euro and British pound are both near recent highs as risk appetite holds up. The Japanese yen is stable with safe-haven demand limited. Foreign buyers aren’t rushing into dollars right now. They have better options.
