The U.S. dollar attempted to recover on Wednesday but could continue to face challenges.
The currency has been on a downtrend for several weeks and could remain exposed to more losses.
While a rebound in treasury yields has supported the dollar to a certain extent this week, expectations that the Federal Reserve may continue cutting interest rates could continue to pull the asset down.
Traders could continue to react to new data releases. In this regard, weak consumer confidence data has sparked worries about the health of the US economy. Future deterioration in US consumer sentiment could affect both the dollar and Treasury yields. Key economic data and Federal Reserve members’ comments later this week could significantly influence the dollar and Treasury yields.
US GDP data on Thursday is expected to show strong growth, which may support the dollar and push yields higher. Additionally, Fed Chair Powell’s speech and the Core PCE price index on Friday will be closely watched for any hints about the pace of future rate cuts, with inflation figures potentially shaping upcoming monetary policy decisions.
