Barclays Bank analysts BARC said in a note that the US dollar will remain the strongest and most demanded currency until the risk related to rising inflation rates is resolved, energy security is maintained in the Eurozone, and the risks of economic growth slowdown in China are avoided. Below are the main drivers of the dollar today:

Important Economic Data

The foreign exchange market, especially investors interested in the US dollar, is awaiting the highly important Consumer Price Index (CPI) data, as it will indicate the upcoming moves of the US Federal Reserve because it reflects the inflation rates within the United States.

Rising inflation rates will lead the US Federal Reserve to make decisions to increase the pace of US interest rates to curb the high prices, despite the risks of economic recession, which enhances the value and performance of the US dollar during today's trading.

On the other hand, traders are also awaiting US retail sales data next Friday, both monthly and core. If they rise, it indicates an increase in consumer spending, which also reflects on rising interest rates and boosts the performance of the US dollar.

US Treasury Bonds

US Treasury yields are declining at the same time that the US dollar is rising due to concerns about the anticipated economic recession in the United States. The yield on 10-year US Treasury bonds falls to 2.984% from 3.79%, and the yield on 30-year US Treasury bonds falls to about 3.172% from approximately 2.97%.

The Dollar Now

The rise of the US dollar coincides with a high demand for it as a safe haven amid the current conditions of geopolitical risks and rising US interest rates, as it replaces gold, which is considered the safest commodity safe haven. The US Dollar Index DXY is now hovering at the level of 107.957 points, with huge increases of 1%. The most popular foreign currency pairs with the dollar trade as follows:

The USD/EUR pair is at 0.99291, up by 1.14%.
The British pound is falling against the dollar at 1.18949 by 1.16%.
The Canadian dollar trades against the dollar at 1.29857 with an increase of 0.37%.
The Australian dollar trades at 0.67442 with strong declines.
The New Zealand dollar is also falling at levels of 0.61240 with a decline of about 1.10%.
Meanwhile, the dollar rises strongly against the Japanese yen at 137.3735 points with an increase of 0.95%.