Dollar Steadies After Prolonged Slide As Markets Await Key Inflation Data

The U.S. dollar paused its multi-day decline on Thursday as traders shifted into wait-and-see mode ahead of critical inflation data expected later in the week. After several sessions of broad weakness driven by falling Treasury yields and rising rate-cut expectations, the dollar found temporary support in quieter market conditions.

The Dollar Index held near recent lows but edged slightly higher intraday, reflecting a modest pullback in risk appetite. Treasury yields stabilized across the curve, with the 10-year yield hovering near its weekly midpoint after sharp swings earlier in the month.

In equities, U.S. futures traded mixed, with tech names showing mild consolidation following a strong start to December. Energy and financial stocks outperformed as traders rebalanced ahead of Friday’s macro releases.

EUR/USD and GBP/USD drifted lower as the dollar regained footing, though both pairs remain near multi-month highs amid improving European sentiment and softer U.S. data. The yen gave back part of its recent gains as investors unwound defensive positions established during last week’s volatility spike.

Gold traded flat to slightly lower, weighed down by the dollar’s stabilization but supported by subdued yields and ongoing uncertainty surrounding the U.S. government shutdown, which continues to delay key economic indicators. The metal remains well bid near its recent range lows.

In commodities, oil prices held within a tight range as traders weighed signs of softer U.S. demand against expectations of further supply adjustments from major producers.

With markets entering a data-heavy stretch, traders now look toward U.S. inflation figures and upcoming central-bank communications for clearer signals on whether the Fed will maintain its cautious stance—or accelerate the pivot toward policy easing in early 2026.