The U.S. dollar has traded higher in recent times sessions. The Key to the dollar’s direction is its reaction to looming CPI data and whether key technical support in the USD index holds out.
The dollar dipped to a one-month low versus the euro on Wednesday amid lower Treasury yields as traders braced for a key U.S. inflation report later in the day that could dictate the path of Federal Reserve policy. For now the dollar continues to fare much better against the low-yielding Japanese yen.
The DXY (USD index), which tracks the dollar against a basket of six major currencies, has sunk in recent sessions. While it trades above 104.256 , retrace of the 100.610 to 106.510 (December to April) rise, the dollar will likely consolidate before making a new recovery attempt.
