US dollar retreats after post-CPI rally

During the North American session, the DXY Index lost -0.14% of its value and dropped to 104.70. Investors are benefiting from the spike on Tuesday in response to the CPI data, which caused the Fed to reevaluate its rate-easing projections.

For the remainder of the week, the markets will keep an eye on the Producer Price Index (PPI) and Retail Sales in order to make predictions about the upcoming Fed decisions.

The Fed is unlikely to cut rates in the near term, based on inflation data and cautious Fed officials. Markets are delaying the start of the easing cycle to June, with no US reports during the session. The release of January’s Retail Sales and Producer Price Index figures may add volatility to the dollar.

US Treasury bond yields have consolidated, with current rates placing 2-year, 5-year, and 10-year yields at 4.56%, 4.22%, and 4.25% respectively. The odds of a cut at the May meeting have declined, and markets are pushing the easing cycle to June.