The sharp sell-off in the index meets some support near 104.00.
Investors now see the Fed reducing its rates in the summer 2024.
Producer Prices, Retail Sales take centre stage later in the session.
The greenback attempts to grab some breathing space following Tuesday’s steep CPI-driven pullback to the vicinity of 104.00 when tracked by the USD Index (DXY).
USD Index now focuses on data
The index trades within a tight range in the area of two-month lows just above the 104.00 hurdle as market participants continue to digest Tuesday’s lower-than-expected US CPI.
In line with the dollar’s retracement, US yields trade in multi-week lows across the curve pari passu with investors’ repricing of potential interest rate cuts by the Federal Reserve at some point in June–July 2024.
Moving forward, the index is expected to remain under scrutiny in light of the upcoming release of Producer Prices and Retail Sales, while Mortgage Applications gauged by MBA and Business Inventories will complete the daily docket.
Additionally, FOMC M. Barr (permanent voter, centrist) and Richmond Fed T. Barkin (2024 voter, centrist) are due to speak.
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