USD: Risk-off flows and CPI in focus – Danske Bank

💡 DMK Insight

The US Dollar’s strength at $80.03 signals a risk-off sentiment that traders need to watch closely. With the Dollar gaining ground alongside the Yen and Franc, it indicates that investors are seeking safety, likely due to uncertainty ahead of the US CPI release. Falling US yields typically suggest a flight to quality, which can lead to volatility in riskier assets like cryptocurrencies and equities. If inflation data comes in hotter than expected, we could see a sharp reaction in the Dollar, potentially pushing it higher and impacting correlated markets. Traders should monitor key levels around $80.50 and $79.50 for the Dollar, as these could determine the next move. A break above $80.50 could signal further strength, while a drop below $79.50 might indicate a reversal. Keep an eye on how this risk-off sentiment affects crypto markets, particularly SOL, as it trades at $80.03. If the Dollar continues to strengthen, SOL could face downward pressure, making it crucial to watch for support levels around $75.