Uncertainty over Fed's Rate Path Could Weigh on Dollar

Dow Jones08-11 16:23

0823 GMT - The dollar is at risk of falling given the lack of confidence in how the Federal Reserve will respond to the energy-price shock driven by the Middle East conflict, MUFG Bank's Derek Halpenny says in a note. Fed Chairman Kevin Warsh has failed to provide any clear signals about potential interest-rate rises as he refrains from forward guidance. Concerns that the Fed could keep rates on hold despite underlying inflation remaining elevated is causing a steepening of the Treasury yield curve where the gap between long-term and short-term yields widens as long-term yields stay elevated, Halpenny says. The DXY dollar index rises 0.1% to 99.895. The 10-year Treasury yield rises to an 11-day high of 4.7354%, LSEG data show.

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