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17/05/24
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USD Steady, But Set for Sharp Weekly Drop
On Friday, the U.S. dollar inched in European trade but was set for a sharp weekly drop after easing inflation and weak retail sales put the focus back on Federal Reserve rate cuts.
The U.S. dollar index, which measures its strength against 6 other major currencies, was up 0.2% at 104.580, slightly higher than a 5-week low just lower than the 104 seen earlier in the week.
The dollar recovered somewhat after several Fed officials, especially members of the rate-setting committee, noted that they had to have more confidence that inflation was moving lower, beyond April’s easing inflation.
On Thursday, Loretta Mester, the St. Louis Federal Reserve president said she believed that it would take longer to reach the 2% target than what she had expected. She added that more monitoring of new data was required.
John Williams, the Federal Reserve Bank of New York President said he didn’t see any indicators that showed the stance of monetary policy had to change now.
The US dollar was still on track for a weekly loss of about 0.7% after the cooler-than-expected U.S. inflation data fueled expectations the Fed would deliver 2 interest rate cuts this year, likely beginning in Sept.
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