The rise in the US dollar tests the Fed's patience, global currencies differ on inflation outlook

According to data from the U.S. Consumer Price Index (CPI) data, inflation fell 3.2% year-on-year, below 3.7%, but above the Fed's 2% target, the core CPI remained at 4.1%. These mixed signals have heightened speculation that the Fed will remain cautious on interest rate cuts and triggered volatility in the foreign exchange market. The dollar strengthened, with the dollar index hitting a one-week high of 103.8, while the yen and pound fell. Emerging market currencies have mixed responses. Investors are currently awaiting an upcoming personal consumption expenditure (PCE) report to find further policy clues.