US inflation expectations can be held responsible for the recent run-up in the US Treasury bond yields and the US Dollar, despite the market’s latest consolidation.
That said, the inflation expectations, as per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) data, rose in the last three consecutive days to end Wednesday’s North American session at the highest level in a week.
With this, the 5-year and 10-year inflation expectations per the aforementioned calculations rose to 2.23% and 2.30% at the latest.
It’s worth observing that the Fed officials’ ability to please US Dollar bulls with hawkish statements and upbeat Fed Beige Book report join the firmer US inflation expectations to keep the USD buyers hopeful despite the latest retreat from the yearly high.
Moving on, the weekly US Initial Jobless Claims and the quarterly readings of Nonfarm Productivity, as well as the Unit Labor Costs for the second quarter (Q2), will decorate the calendar but speeches from multiple Fed officials will be the key to watch.
Also read: Forex Today: US Dollar holds firm on risk aversion and US figures; China trade data next
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD regains positive traction amid signs of easing US-China trade tensions
AUD/USD attracts some dip-buyers during the Asian session on Wednesday. Hopes for a possible de-escalation in the US-China trade war boost investors' appetite for riskier assets and support the Aussie. Meanwhile, The USD recovers further from a multi-year low, though the weakening confidence in the US economy and the Trump-Powell spat might cap gains.
USD/JPY jumps to one-week high amid likely US-China trade de-escalation
USD/JPY builds on the overnight solid rebound from sub-140.00 levels and jumps to a one-week high during the Asian session on Wednesday. Signs of easing US-China trade tensions lead to a sharp recovery in the risk sentiment and weigh on the safe-haven JPY.
Gold retreats further from record high amid US-China optimism, rebounding USD
Gold price extends the previous day's rejection slide from the $3,500 mark as hopes for US-China trade war de-escalation weigh heavily on safe-haven assets. Trump's remarks that he has no intention of firing Fed Chair Powell allowed the USD to move away from a multi-year low, which prompted some follow-through profit-taking around the precious metal.
Ethereum rallies 10% amid decline in CME short positions
Ethereum saw a 10% gain on Tuesday after the general crypto market rallied alongside Bitcoin. The rally comes after the ETH Chicago Mercantile Exchange basis plunged from 20% in November to about 5% in April.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.