Dollar rebounds, US data and global tensions affect sentiment – London Business News | Londonlovesbusiness.com

The US dollar saw a modest rebound after experiencing a steep decline, as market participants weighed a mix of economic data.

A subdued move in Treasury yields also tempered upward momentum for the greenback. Meanwhile, the PCE price index and the second estimate of Q2 GDP matched forecasts, reinforcing expectations of future Federal Reserve rate cuts.

However, the unchanged outlook for a January rate adjustment provided some underlying support to the dollar.

Yesterday’s economic indicators affected sentiment. October’s non-defense capital goods orders, excluding aircraft, declined, pointing to cooling business investment. The Chicago PMI reported its sharpest contraction in six months, underlining a deceleration in economic activity.

Looking ahead, easing tensions in the Middle East and Eastern Europe could reduce demand for safe-haven assets, including the greenback. Despite its latest retracement, the US dollar remains near a high after a strong surge since the beginning of October. However, it could remain exposed to any changing expectations regarding US monetary policy.