The US dollar was broadly stable on Wednesday as

(MENAFN- MENAFNEditorial) Kindly find " Today's markets analysis on behalf of Thadeu Dos Santos, Regional Director at Infinox


The US dollar was broadly stable on Wednesday as Treasury yields steadied. The greenback also found some support against the euro amid persistent political and fiscal concerns in Europe, but weakened against sterling.

The British Pound outperformed after UK inflation surprised to the upside, reinforcing expectations that the Bank of England may need to adopt a more restrictive monetary policy stance
That contrasts with the Federal Reserve, where markets broadly expect interest rates to remain unchanged next week even though another increase is still priced in before year-end. With the Fed now in its blackout period and few major US releases ahead of the meeting, the US Dollar may become more sensitive to reaction to economic data elsewhere. Friday's Japanese inflation figures provide one such test.

US technology earnings are another important near-term catalyst. Meta and Tesla report today, with investors focused on whether heavy AI-related investment is generating sufficient returns. Disappointing guidance could revive concerns over the sustainability of the AI spending cycle, encourage renewed demand for Treasuries and pull US yields lower, weighing on the dollar. Stronger results would ease those concerns, reduce defensive bond demand and potentially provide some support to yields and the greenb ck.

Next week's concentration of central bank decisions will be an important driver, leaving the currency vulnerable as monetary policy expectations change. At the same time, elevated oil prices and persistent US inflation risks continue to provide a floor for Treasury yields.

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