The US dollar index (DXY) is experiencing subdued activity as softer-than-expected US Consumer Price Index (CPI) data has led to a rally in risk assets across Asia. This "everything rally" has seen Chinese and Hong Kong markets rise significantly, with mainland indexes up approximately 1% and the Hang Seng Tech index outperforming with gains exceeding 2%. The softer US inflation figures have bolstered regional currencies, with the Japanese yen and Thai baht leading the charge, as investors anticipate a less aggressive stance from the Federal Reserve on interest rates.
The weaker US dollar is enhancing the competitiveness of Asian exports, further boosting stock markets in the region. Commodities are also benefiting, with Brent crude oil prices climbing to around $82 a barrel, driven by geopolitical concerns such as the International Energy Agency's warning about the impact of curbs on Russia. This positive sentiment in equities and commodities is underpinned by improved financial conditions and a favorable global growth outlook.
As of 21:02 on January 15, the DXY is trading at 109.02, slightly down from its last close of 109.09. The index remains below its 52-week high of 110.18, reflecting the current subdued state of the US dollar amid the ongoing rally in risk assets and regional currencies.