Anna 
The US Dollar Index (DXY) continues its downward trajectory, marking the fourth consecutive session of decline as it slips to around 104.20 during Asian trading hours on Monday. Despite the positive impact of the improved Producer Price Index (PPI) from the United States, the US Dollar (USD) faced pressure and closed the session with losses. With the President’s Day bank holiday, minimal movement is expected in the Greenback.
The volatile session in US Treasury yields on Friday contributed to the downward pressure on the US Dollar. Former Fed official James Bullard’s suggestion that the Fed should consider lowering interest rates in the March meeting to prevent hindering economic activity due to higher rates added to the uncertainty. Market sentiment indicates an expectation that the US Federal Reserve will refrain from rate cuts in March and May, with a 52% likelihood of a 25 basis points (bps) rate cut in June, according to the CME FedWatch Tool.
The US Producer Price Index (PPI) reported an annual growth of 0.9%, surpassing expectations and the previous figure. The month-over-month improvement was 0.3%, contrasting with the previous decline. In January, the US Core Producer Price Index (YoY) rose by 2.0%, exceeding predictions and the previous reading. The month-on-month data showed a 0.5% rise, defying expectations. However, the preliminary Michigan Consumer Sentiment Index fell short of anticipation, improving to 79.6 from the previous figure of 79.0 but below the expected 80.0 figure. The mixed data contributes to the overall uncertainty surrounding the US Dollar.
