I would argue that's not too much changed and unless traders are going to price out rate cuts entirely, we're reaching a ceiling of optimism on rates here. That's a tailwind for the dollar that looks to be close to running its course.
"The announcement (reciprocal tariffs) might not come today but it still could later in the week. So, just keep your eyes and ears peeled. But in the meantime, I reckon silence might be golden for risk sentiment in general. See no evil, hear no evil, speak no evil.
The dollar saw its gains from the immediate CPI reaction melt away and then some now as we get into the new day. Meanwhile, US stocks might have ended more mixed but I'll label it as a win compared to the 1% drop initially after the inflation numbers. And all of this came despite yields jumping higher.
A firm technical drop there could see a quick run towards 1.4100 next for the pair as the dollar comes under pressure across the board.
This article was written by Justin Low at www.forexlive.com. Read More Details
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