Key Takeaways:

* The U.S. Dollar eased from recent highs as lower crude oil prices reduced some concerns over renewed inflation pressures.

* Treasury yields stabilised following their recent sharp rise, encouraging profit-taking in the greenback.

* Gold rebounded as a softer dollar, easing yields and bargain buying supported demand for the precious metal.

* Attention now turns to the upcoming U.S. CPI report, which could determine the next move in Treasury yields, the dollar and gold.

Market Summary:

The U.S. Dollar pulled back modestly while remaining near recent highs, as softer crude oil prices eased some concerns over another acceleration in global inflation. Lower energy prices also helped Treasury yields stabilize following their recent sharp rise, reducing part of the yield-driven support that had strengthened the greenback.

With limited major catalysts at the start of the week, the dollar’s latest decline appears largely driven by profit-taking and a technical correction following its recent rally. However, the broader outlook remains closely tied to U.S. inflation and Federal Reserve policy expectations.

Meanwhile, gold prices rebounded as the U.S. Dollar softened and Treasury yields eased, reducing some of the pressure on non-yielding bullion. The precious metal also attracted bargain buying following its recent weakness, while lower crude oil prices helped ease concerns over renewed inflationary pressures.

Attention now turns to the upcoming U.S. CPI report. A stronger-than-expected inflation reading could push Treasury yields higher and reinforce expectations for tighter Fed policy, potentially supporting the dollar while limiting gold’s recovery. Conversely, softer inflation could extend the decline in yields and the greenback, providing further support for gold.