Home ForexArticles The dollar rises before the publication of the PPI; the euro looks for clues from the ECB By Investing.com

The dollar rises before the publication of the PPI; the euro looks for clues from the ECB By Investing.com

by SuperiorInvest

© Reuters.

Investing.com – The U.S. dollar gained ground in European trading on Thursday, retaining its recent strength ahead of the release of further guidance on U.S. interest rates in the form of retail sales and manufacturing inflation data. .

At 06:00 ET (10:00 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, rose 0.1% to 102.490.

Dollar rises ahead of US PPI release

The dollar received a boost earlier in the week after the release of better-than-expected US data earlier this week, increasing bets that the Federal Reserve will take its time in cutting interest rates.

The U.S. currency has plunged about 1.7% over the past month, hit hard last week by Federal Reserve chief Jerome Powell's dovish comments during his two-day congressional testimony that markets They took it as a suggestion that the US central bank was preparing to start cutting interest rates in the summer.

However, the index is still up around 1.5% this year as US data has shown the economy remains strong, and Tuesday's CPI release suggested inflation remains a major bright spot. troubled.

Attention now turns to the February release, in particular, and the same month, for more clues about the possible thinking of Fed officials ahead of next week's policy-setting meeting.

“The CPI will be closely watched as investors seek confirmation that inflation is not as high as the CPI report suggests,” ING analysts said in a note. “The consensus is 0.2% mom for the core PPI, but the rumored figure is surely higher after the CPI.”

The euro lacks volatility; Will the ECB start cutting soon?

In Europe, it was down 0.1% to 1.0942, with the lack of meaningful economic data in the eurozone contributing to the lack of volatility.

They kept rates at record levels of 4% last week, but traders expect the central bank to begin cutting interest rates soon, given slow growth in the region, and in Germany in particular.

The European Central Bank will likely begin cutting rates during the spring, French central bank chief and ECB policymaker Francois Villeroy de Galhau said on Wednesday, describing spring as between April and June.

ECB President Christine Lagarde hinted earlier this month that a long-awaited rate cut would be more likely to come at the central bank's meeting in early June, rather than in April.

was trading 0.2% higher at 1.2816, and is expected to keep interest rates unchanged when it meets next week as inflation remains above the central bank's 2% medium-term target.

BOJ meeting gains importance

In Asia, it traded 0.1% higher at 147.82, with the yen shedding some of the recent gains, aiming for a rally next week.

Reports have suggested the central bank is very close to ending its ultra-loose monetary policy, especially after an upward revision to data showed the Japanese economy dodged a technical recession in the fourth quarter.

rose 0.1% to 7.1902, amid lingering doubts about an economic recovery in the country, while it rose 0.1% to 0.6624, with strength in commodity prices pushing up the dollar Australian to a high of almost two months in recent sessions.

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