Home Business News Dollar trades sideways on thin volumes

The dollar index continues to trade sideways on Monday near its recent high. Investors are digesting last week’s latest PCE price index report, keeping the market flat.

Data released on Friday showed that the Fed-preferred inflation gauge rose 0.3% month-on-month in February, slowing from an upwardly revised 0.5% gain in January, and remained close to market expectations.

The report also highlighted that consumer spending increased the most in over a year last month, showcasing the resilience of the U.S. economy.

At the same time, Fed Chair Powell reiterated that he was in no hurry to cut interest rates, emphasizing that the latest PCE inflation data was in line with the Fed’s objectives.

Later on Monday, the release of the ISM Manufacturing PMI for March could put some downward pressure and bring some volatility to the greenback if the report continues to indicate contractions in manufacturing activity. However, the market consensus projects an improved reading of 48.4, up from the previous reading of 47.8 points.

Other economic data releases this week could also fuel the volatility of the US currency as traders review their monetary policy expectations and as trading volumes return to normal.

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