Post #15818

DXY Holds $96 as CPI Softens, Market Awaits PCE DXY is barely reacting to today’s softer CPI print. The dollar remains just above the $96 support zone. CPI YoY came in 0.1% better than expected, moving inflation slightly closer to the Fed’s 2% target. June cut odds rose to 69% (from 63%), and markets now price about 61 bps of easing. Despite the softer CPI print, the dollar isn’t fading. In fact, the broader picture arguably looks better for DXY. This week’s stronger NFP and unemployment data were bullish catalysts. Cooler CPI is a mild headwind, but more of a trade-off than a net negative. Assuming no immediate change in monetary policy, U.S. real yields have improved as inflation expectations ease while nominal rates remain steady. That dynamic can continue to support the dollar until markets begin pricing more aggressive cuts or policy expectations materially shift toward June. Relative to other major peers, the U.S. still maintains a real yield advantage. All eyes now shift to PCE next week - Alan