The dollar remains stable; Fed Could Provide Boost By Investing.com

The dollar remains stable; Fed Could Provide Boost By Investing.com
The dollar remains stable; Fed Could Provide Boost By Investing.com

Investing.com – The U.S. dollar remains in a tight range on Tuesday, stabilizing as traders look for fresh clues on the timing and extent of the Federal Reserve’s rate cuts this year.

At 10:30 a.m. (CET), the , which tracks the currency’s performance against a basket of six other major currencies, remains virtually unchanged at 104.475.

The dollar remains in a narrow range awaiting the Fed’s statements

The dollar is basically stable on Tuesday, but has risen so far this week after several Fed members called for caution on monetary policy, even after last week’s data showed an easing of pressures on consumer prices in April.

The vice president said Monday that it was too early to know whether the slowdown is “lasting,” and the vice president signaled that political monetary policy needs more time, dashing hopes of imminent cuts.

There are more statements from Fed spokespeople to digest this Tuesday, including Barr once again, as well as members of the FOMC, and.

“Expectations for a full Fed easing by the end of the year have been reduced slightly to 42 basis points, although we suspect the next major move will not come before the US core PCE release on May 31,” they note. ING (AS:) analysts in a note.

“Our view remains neutral on the dollar going into the coming days, although risks appear slightly skewed to the upside.”

Calm in the euro after the sharp drop in the German PPI

In Europe, the pair is up 0.1% at 1.0861, barely moving after being pushed down more than expected in April, down 3.3% year-on-year, mainly due to the drop in energy prices.

Excluding such energy prices, Germany’s producer prices were 0.6% lower than in April 2023.

Inflation is falling in the eurozone’s largest economy, something that should help ECB policymakers agree to an interest rate cut in June.

“We do not expect major swings today, as the eurozone and US data release schedules are fairly clear,” ING adds. “The speech that the president of the European Central Bank, Christine Lagarde, will give today at an event in honor of Janet Yellen may not touch on the issue of monetary policy at all.”

The pair rises to the 1.2709 level, remaining in a tight range ahead of Wednesday’s release of UK April CPI data, where the annual inflation rate is expected to have slowed sharply to near the level. of the 2% target set by the Bank of England.

Yuan and yen remain weak

In Asia, the pair rose 0.1% to 7.2371, remaining close to six-month highs after Banco Popular (BME:) decided to keep its benchmark lending rates unchanged. at record lows at the beginning of the week.

The pair fell 0.1% to 156.17, due to persistent pressure from US interest rates, and uncertainty over the Bank of Japan’s plans to tighten its monetary policy.

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