The US Dollar is trading in a narrow range on Tuesday as investors adopt a cautious stance ahead of the release of crucial US inflation data. While high-beta and carry-trading currencies have shown some strength against the Greenback, the overall impact on the US Dollar Index (DXY) has been limited due to a counterbalancing rise against the Japanese Yen.
Economic Data and Market Sentiment
Today’s focus is on the release of the US Producer Price Index (PPI), which is expected to show a deceleration in both monthly and annual terms. This report will provide further insights into inflationary pressures ahead of Wednesday’s highly anticipated Consumer Price Index (CPI) data.
Equity markets have opened with strong gains in Asia, with positive sentiment carrying over to European and US markets. However, investor attention remains primarily on the upcoming inflation reports and their potential impact on Federal Reserve monetary policy.
Technical Outlook for the US Dollar
The DXY is currently trading within a tight range, with support at 103.18 and resistance at 104.00. The direction of the US Dollar is likely to be determined by the outcome of the upcoming inflation data and subsequent market reaction.
