The dollar rebounded on Wednesday, lifted by higher Treasury yields after cautious commentary from Federal Reserve officials. Chicago Fed's Austan Goolsbee emphasized awaiting further economic data to gauge inflation trends, while Fed Vice Chair Philip Jefferson warned uncertainty remained amid potential tariff-driven inflation. Investors now focus on upcoming U.S. producer prices, retail sales, and jobless claims data due Thursday.

International Deals Bolster Sentiment

The dollar gained additional support following Qatar’s landmark $200 billion agreement to purchase Boeing aircraft during President Trump's Middle East visit. ECB supervisors urged European banks to reassess their dollar funding strategies amid Fed policy uncertainties, while U.S. diplomats prepared for key Russia-Ukraine talks in Istanbul. Bloomberg clarified the U.S. is not pursuing a weaker dollar in ongoing tariff negotiations.

EUR/USD Holds Steady Amid Caution

EUR/USD ended flat after surrendering earlier gains, pressured by rising yields and declining gold prices. Technical signals suggest near-term vulnerability, targeting the 55-day moving average at 1.1043, though long-term bullish sentiment remains elevated. ECB policymaker Joachim Nagel reinforced confidence in the euro’s gradual rise as a reserve currency. EUR/CHF climbed toward its key 200-day moving average at 0.9405, supported by improving European trade sentiment.

Sterling Dips Ahead of Key UK Data

GBP/USD slipped below its 21-day moving average, with traders cautious ahead of Thursday’s UK GDP report. BoE policymaker Catherine Mann highlighted Britain's resilient labor market, though upside for sterling remains capped near its 2025 peak at 1.3445.

Yen Stabilizes, Commodities Weaken

USD/JPY trimmed earlier losses, supported by firmer Treasury yields and reduced speculation of U.S. currency intervention. Technical resistance remains around 147.60, with strong support near 145.60. Commodity-linked currencies weakened notably; AUD/USD declined sharply amid falling metals prices. Oil fell 1.1% on rising U.S. inventories, gold dropped 2.4% to one-month lows, and copper slid 1.8%, reflecting cautious optimism about global growth.

Market Snapshot:

• EUR/USD unchanged
• GBP/USD down slightly
• USD/JPY stable, up modestly
• AUD/USD significantly lower
• Dollar Index (DXY) strengthened