This week’s main U.S. economic focus is PCE data due on Friday, which will come after hotter than expected consumer and price inflation releases for January and February
The dollar gained on the euro on Thursday ahead of key U.S. inflation data due on Friday and as investors squared positions for month- and quarter-end.
The Japanese currency was also modestly weaker at 151.38 per dollar having traded just short of the 152 mark at its lowest since 1990 on Wednesday before Japan’s top monetary officials indicated they were ready to intervene to prevent further declines.
This week’s main U.S. economic focus is PCE data due on Friday, which will come after hotter than expected consumer and price inflation releases for January and February.
Traders will look for any new clues on whether the Federal Reserve remains on track to reduce rates as soon as June as inflation stays sticky and economic growth remains strong.
According to Helen Given, FX trader at Monex USA, higher than expected inflation so far this year is unlikely to last, which should keep the Fed on pace for three 25 bps cuts in 2024.
The dollar rallied earlier on Thursday after comments from Federal Reserve Governor Christopher Waller late on Wednesday that recent disappointing inflation data affirms the case for the U.S. central bank holding off on cutting its short-term interest rate target.
But Given said that move was a little bit outsized and I think it’s really to do with the fact that there is just slim flows across the world.
U.S. Treasuries and stock markets will be shut for the Good Friday holiday and foreign exchange markets are likely to be lightly staffed, which may heighten volatility.
Fed Chair Jerome Powell is also due to speak on Friday.
Data on Thursday showed that the U.S. economy grew faster than previously estimated in Q4, boosted by strong consumer spending and business investment in nonresidential structures such as factories.
