'Torrid week' for US Dollar ahead of today's PCE index
|It's been a torrid week for the US dollar, which looks on course to end the week at or around its lowest level versus its major peers since at least February 2022. This seemed almost inconceivable less than a week or so ago, at a time when markets were bracing for the possibility of a further blow up in the Middle East conflict.
Since then, however, the news of the Israel-Iran ceasefire and the aforementioned concerns over the credibility of the Federal Reserve have sent the dollar tumbling. A downward revision to the first quarter GDP print failed to help matters on Thursday.
According to the data, the US economy contracted by 0.5% on an annualised basis in Q1, a sharper downturn than the -0.2% consensus. We note, however, that not only was this downturn largely due to trade distortions, but that more timely economic reports have been slightly less dour.
The PMI figures beat expectations on Monday, as did durable goods orders on Thursday, which leapt by an eye-watering 16.4% in May (the largest increase in over a decade) - this was mostly due to a massive one off booking of aircraft by Boeing.
Excluding transportation, orders increased by a far more modest 0.5% MoM. Next up will be today’s PCE inflation figures - the Fed’s preferred measure of price growth.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.