The US dollar remained relatively flat in the absence of strong economic data releases today.
However, the currency continued to see gains since the beginning of the year thanks to a resilient economy and could continue to do so as expectations lean strongly toward the Federal Reserve maintaining its interest rates unchanged in March.
Attention could now turn to the publication of the CPI data next week which could affect traders’ expectations regarding the next steps in monetary policy.
The euro stabilized to a certain extent this week but could remain under pressure as markets continue to price in an early interest rate cut.
The latter could become increasingly likely as inflation could move closer to the target while economic conditions remain difficult.
However, European Central Bank members continue to communicate a cautious message regarding rate cuts. Next week’s euro area GDP growth rate publication could help gauge the state of the economy and could impact the currency.
The pound continued to trade without much change. Traders could continue to monitor economic data for clues on the next steps in monetary policy while Bank of England (BoE) officials remain cautious in the face of elevated inflation.
As a result, the currency could strongly react to the publication of new economic data next week with job market data expected on Tuesday, CPI data on Wednesday, GDP on Thursday, and Retail Sales figures on Friday.