**BREAKING: US DOLLAR RALLY STALLS AS TREASURY YIELDS EASE BEFORE FED DECISION**
The US Dollar’s recent advance is losing momentum as Treasury yields pull back and market risk appetite rebounds following a sharp tech-sector selloff, according to Scotiabank strategists Shaun Osborne and Eric Theoret. The greenback’s broad-based gains are now moderating ahead of the Federal Reserve’s upcoming policy meeting, with traders reassessing positions as borrowing costs retreat from recent highs. The shift comes as investors digest the tech-driven market turbulence and position themselves cautiously before the FOMC announces its interest rate decision. Lower yields typically reduce the Dollar’s appeal by diminishing returns on Dollar-denominated assets, while improved risk sentiment encourages flows into higher-yielding currencies and riskier assets. The combination of these factors is creating headwinds for USD bulls who had driven the currency higher in recent sessions on rate differential expectations.
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FXnCO Insight
** Traders should monitor yield movements closely as any further Treasury rate declines could accelerate Dollar weakness and create tactical opportunities in EUR/USD and commodity currencies before the Fed announcement.
Source: FXStreet