Ella 
The gauge of U.S. inflation expectations may be the reason markets have turned bearish on the greenback recently, after propelling the greenback to multi-day highs last week.
That said, the Federal Reserve Bank of St. Louis (FRED) released a measure of US inflation expectations measured by 10-year and 5-year breakeven inflation rates, which reversed Friday’s consolidation rally and fell to a new five-week low.
Notably, the above data show that 5-year and 10-year inflation expectations fell to 2.21% and 2.30% respectively.
Notably, Fed officials were unable to please the market with a major hawkish surprise, which could weigh on U.S. Treasury yields and the dollar along with the latest weakness in U.S. inflation indicators.
However, cautious sentiment ahead of the Conference Board (CB) Consumer Confidence Index for August in the US (116.2 expected, 117.00 previously) released within the day will boost the dollar and markets. On top of that, the Fed’s preferred inflation gauge, the U.S. core personal consumption expenditures (PCE) price index for July and non-farm payrolls (NFP) for August, will be closely watched.
