Tariffs & Geopolitics Hold Dollar Back, PPI Leads
The US dollar weakened slightly against a basket of currencies on Friday (February 27th), as a combination of US-Iran tensions and uncertainty over tariff policy prompted investors to adopt a cautious stance.
The dollar's weakening occurred despite a brief risk-off sentiment triggered by a decline in US technology stocks—a factor that typically supports safe-haven demand—indicating the market's continued hesitation to return to the dollar.
Pressure on the greenback was also driven by broader concerns: the volatile direction of tariffs, the issue of central bank independence, and the risk of geopolitical intervention—particularly regarding Iran.
In a note to clients, BNY analyst Bob Savage assessed that global investor demand for hedging US assets against the risk of a dollar decline still "plays a significant role" in limiting the USD's upside.
In recent trading, the Dollar Index (DXY) fell around 0.2% to 97.63, but its movement remained within the tight range seen in recent sessions.
The market now awaits the release of the US Producer Price Index (PPI) for January at 13:30 GMT as the next catalyst to gauge the direction of inflation and expectations for the Fed's policy.
Source: Newsmaker.id
