The pressure is mounting as the market’s focus is now on the US inflation data that will come out tonight.
China’s producer price index (PPI), which rose sharply in April, indirectly sparked market concerns over rising inflationary pressures in the US.
The US Federal Reserve (Fed) has maintained a very loose monetary policy and clarified that higher inflation levels may be temporary and will not change its current policy.
Even so, expectations of rising inflation in April have increased pressure for the US stock market to continue trading in the red ocean and this has given the greenback a chance to rise.
The Dow Jones Industrial Average was down more than 1%, and the NASDAQ was down 2%, making it its biggest one -day decline since February.
In the Asian session, the dollar index, which measures the strength of the greenback against six other major currencies, rose slightly to 90.27. Despite rising, the currency remained traded around a 10 -week low.
The rise of the greenback dollar also followed a higher increase in 10 -year US treasury yields which rebounded to 1.625%.
Meanwhile, the euro eased slightly after soaring to its latest 3 -month high following the publication of positive data from the European Zone which showed the ZEW outlook for the European economy rose sharply in May.
