US Dollar (USD) traded subdued overnight in absence of fresh catalyst. DXY was last seen at 108 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.  

Deceleration in core CPI may weigh on USD

"In the semi-annual testimony to Senate Banking panel overnight, Fed Chair Powell signalled that the Fed was in no rush to cut which had been well priced by markets, hence impact on FX has been rather muted. The impact of Powell’s comment was more felt on gold as a no rush to cut implies high for longer may remain. This also comes timely to keep gold’s rise in check for now."  

"Daily momentum and RSI indicators are not showing a clear bias. Sideways trade likely for now. Support at 107.80/90 levels (50 DMA, 23.6% fibo retracement of Oct low to Jan high), 107 levels. Resistance at 108.40 (21 DMA), 110.00/20 levels (previous high)."  

"On data, US CPI is top focus tonight (9:30 pm SGT). A deceleration in core CPI may weigh on USD but tariff uncertainty may still imply that USD dips may be shallow. Later tonight, Powell will testify to the House Financial Services committee (11 pm). He is not expected to deviate too much from his recent remarks. Elsewhere, we are also keeping a look out on details with regards to reciprocal tariffs."