The US dollar remains stagnant at last week’s levels amid ongoing uncertainty. The recent inflation data saw the Consumer Price Index (CPI) rise, while the Producer Price Index (PPI) continued its slowdown, leading to mixed signals about inflation.
Despite the market’s high expectation for a March rate cut by the Fed, some risks could remain regarding the effective monetary policy decision.
However, this week’s retail sales data could provide further insights into inflation trends and the Fed’s potential actions in upcoming meetings.
The Euro is also showing indecisiveness as the economic outlook remains difficult in the euro area. While the ECB officials continue to advocate maintaining higher rates for an extended period of time, which could temporarily support the Euro, doubts remain in regard to the uncertain economic outlook, in particular Germany.
The Chinese yuan is maintaining a short-term bearish trend against the dollar. The People’s Bank of China unexpectedly kept its one-year policy loan rate unchanged on Monday, contrasting with market expectations of more easing measures.
The concerns about the state of the Chinese economy could continue to weigh on the currency.