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According to ING analyst Francesco Pesole, the US Dollar is deriving significant support from the US bond market as long-dated Treasury yields stabilize. However, gains remain capped as market participants weigh ongoing trade frictions between the US and Canada against heightened geopolitical uncertainty surrounding potential Iran-related sanctions. The combination of firm bond yields and safe-haven demand stemming from international trade and geopolitical tensions has helped the Greenback maintain a resilient consolidation phase. Investors are treading carefully, balancing the macroeconomic backdrop of persistent US inflation risks against potential disruptions in foreign trade and global supply chains. Looking ahead, foreign exchange markets will likely take cues from upcoming US economic releases and treasury auction outcomes. Currency traders should closely monitor changes in long-term yields and broader geopolitical developments, which could act as catalysts for the Dollar's next breakout direction.
