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27/05/24
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USD Steady Before Global Inflation Data
On Monday, the US dollar was firm but was on track for its first monthly decline this year, as investors focused on Japanese, European, and U.S. inflation data to evaluate the interest rate outlook globally.
In recent months, the hunt for “carry” has dominated Foreign exchange trade, supporting the dollar and punishing low-yield currencies, while U.S. data has blown cold and hot and dented policymakers’ confidence about the outlook for rates.
Wednesday’s German inflation data and Friday’s eurozone readings will be watched for confirmation of a rate cut in Europe that traders are expecting next week.
Sterling traded at about $1.2745, the high side of the range it has held this year.
The Federal Reserve’s preferred inflation measure, the U.S. core personal consumption expenditures price index, is due on Friday and is expected to be flat month-on-month.
The dollar had dropped after data showed that in April consumer price rises slowed down and if the trend is confirmed could pull it even lower, although the big picture is that inflation indicators and inflation are still higher than the Fed’s target of 2%.
The U.S. dollar index, which measures its strength against 6 other major currencies, was last slightly lower at 104.72. It is set for a fall of 1.5% in May.
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