BNY: Softer US Inflation Shifts Focus to PMI Data for Dollar Direction

Bank of New York analyst Geoff Yu notes that the recent softer US inflation prints have eased the need for a more hawkish Federal Reserve policy path. This shifts the spotlight to the upcoming S&P Purchasing Managers' Index (PMI) data, which will be key to confirming whether growth momentum remains intact.

Markets are now looking to the PMI figures as the next major input for dollar positioning. If growth data holds up, the dollar could find support; any weakness might reinforce expectations of a less aggressive Fed, weighing on the greenback.