Dollar relatively stable ahead of new economic data

The dollar was relatively stable, holding within a consolidation range.

The greenback could remain exposed to changing monetary policy expectations as markets react to new data and Fed comments.

While several Fed members mentioned a cautious approach, Chicago Fed President Austan Goolsbee suggested that multiple rate cuts may be appropriate this year. Markets still price two cuts this year as the base case.

At the same time, the dollar could find some underlying stability in continued labour market resilience. Initial jobless claims rose modestly but remained below expectations and well under historical averages. Meanwhile, continuing claims declined. Looking ahead, today’s producer price data will serve as the next inflection point. Confirmation of easing inflation would reinforce the downward bias in yields and weigh further on the dollar. However, any upside surprise could quickly reprice rate expectations, reviving support for yields and the greenback.