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USD Index Resilience: Policy Path Reconfiguration Amid Inflation Expectations
Abstract:The

The USD index demonstrates structural resilience, supported by deep-seated market consensus on US economic strength and global geopolitical risk hedging, despite recent soft non-farm payroll data.
Subtle Shifts in Policy Path Expectations
Market focus has shifted toward implied inflation paths, with investors highly sensitive to risks of reflation. Volatility in core CPI data is the key variable for monetary policy in the second half of 2026, reinforcing the 'higher for longer' narrative regarding Fed interest rates.
Linkages of Key Macro Variables
- Safe-haven liquidity: Geopolitical conflicts boost energy prices, intensifying input inflation and cementing the USD current status as a core global settlement and reserve asset.
- Interest rate differential: Increasing divergence, such as rising stagflation risks in Japan, continues to support the USD.
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The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
