The dollar began the week steadily, with investors focusing on inflation data from the U.S., Europe, and Japan to inform the global interest rate outlook.
In recent months, foreign exchange trade has been driven by the search for “carry,” which has penalised low-rate currencies and bolstered the dollar, as U.S. economic data has fluctuated and undermined policymakers’ confidence in the interest rate outlook.
Several major currency pairs have remained within tight ranges. The euro, which rose by 0.9 percent against the dollar last week, was trading in the middle of a range it has maintained for over a year at $1.0846.
Trading on Monday was lighter due to public holidays in Britain and the United States.
German inflation data on Wednesday and eurozone readings on Friday will be scrutinised for indications of a European rate cut that traders have anticipated for next week.
The pound was testing the upper end of a range it has held this year at $1.2735. The Australian and New Zealand dollars have retreated from recent highs, with the Aussie at $0.6637 and the kiwi at $0.6122, as markets have scaled back expectations of a U.S. interest rate cut.
Friday’s reading for the core personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, is expected to remain steady month-on-month.
The dollar had declined after data indicated a slowdown in consumer price rises in April, and confirming this trend could weaken it further – but overall, inflation and inflation indicators remain above the Fed’s 2 percent target.
“Achieving the 2 percent inflation goal appears more distant than it did late last year, and several softer inflation readings are necessary to restore confidence,” said analysts at Societe Generale.
Years after a surprise approval for some U.S. exchange-traded fund (ETF) applications.
Further approvals are needed before launch, but the price of the second-largest cryptocurrency by market value rose by 25 percent against the dollar last week and an additional 5 percent to $3,938 in Asian trading on Monday.
“A month ago, many people would have considered the likelihood of an ETH ETF low or far off in the future,” said Justin D’Anethan, head of partnerships at digital assets market maker Keyrock.
