- The US Dollar Index (DXY) trades on a softer note near 103.85.
- The US economy grew at a 3.2% annualized rate for Q4 vs. 3.3% prior.
- The hotter-than-expected inflation data in January has caused investors to push back the timing of the first rate cut.
- All eyes will be on the US Core Personal Consumption Expenditures Index (Core PCE) data, due later on Thursday.
The US Dollar Index (DXY) edges lower to 103.85 after retreating from weekly highs of 104.25 during the early European session on Thursday. Investors await the US Core Personal Consumption Expenditures Index (Core PCE) for January, due later on Thursday. This report might offer cues about the trajectory of inflation in the United States and could trigger the volatility in the market.
Data published by the US Bureau of Economic Analysis (BEA) on Wednesday showed that US Gross Domestic Product (GDP) for the fourth quarter (Q4) expanded at a 3.2% annualized rate. The figure came in below the market consensus and the previous reading of 3.3%.
Several Fed members in recent weeks agreed that they need additional evidence of inflation data before shifting the monetary policy stance. Meanwhile, the New York Fed President John Williams said that despite the Fed still has a ways to go before reaching its inflation target of 2%, the door is opening for interest rate cuts this year, depending on the incoming data. Fed Governor Bowman stated that inflation will continue to decline with rates remains on hold at the current levels, but it is not yet time to start cutting rates.
The hotter-than-expected CPI data has caused investors to push back the timing of the first rate cut. The markets have priced in 80 basis points (bps) of rate cuts this year, lower than 175 bps priced in around mid-January.
Later on Thursday, traders will closely monitor the US Core Personal Consumption Expenditures Index (Core PCE) data for January, which is expected to ease to 2.8% YoY from 2.9% in the previous reading. Also, the US Personal Income, Personal Spending, pending Home Sales and the weekly Initial Jobless Claims are due later in the day.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0750 to start the week
EUR/USD trades in positive territory above 1.0750 in the European session on Monday. The US Dollar struggles to find demand following Friday's disappointing labor market data and helps the pair hold its ground.
GBP/USD edges higher toward 1.2600
Following Friday's volatile action, GBP/USD pushes higher toward 1.2600 on Monday. Soft April jobs report from the US and the modest improvement seen in risk mood make it difficult for the US Dollar to gather strength.
Gold rebounds above $2,310 after downbeat NFP data, eyes on Fedspeak
Gold price trades in positive territory above $2,310 after closing the previous week in the red. The weaker-than-expected US employment data have boosted the odds of a September Fed rate cut, hurting the USD and helping XAU/USD find support.
Addressing the crypto investor dilemma: To invest or not? Premium
Bitcoin price trades around $63,000 with no directional bias. The consolidation has pushed crypto investors into a state of uncertainty. Investors can expect a bullish directional bias above $70,000 and a bearish one below $50,000.
Week ahead: BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.