Investing.com – The U.S. dollar traded in a tight range on Tuesday, stabilizing as traders looked for new clues about the expected timing and size of Federal Reserve rate cuts this year.
At 04:30 ET (08:30 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading largely unchanged at 104.475.
Dollar range is higher than Fed speakers
The dollar is essentially flat on Tuesday but has risen so far this week as several Fed officials called for continued policy caution even after data last week showed an easing of consumer price pressures in April.
The vice-president said on Monday it was too early to say whether the delay would be “prolonged”. The Vice President noted that restrictive policies require more time, blunting hopes for early cuts.
There are more Fed speakers to digest on Tuesday, including Barr again, as well as FOMC members, and.
“Expectations for total Fed easing by year-end have been modestly reduced to 42 basis points, but we suspect the next big move in OIS prices won’t come before the May 31 US core PCE,” according to ING analysts.
“Our view remains neutral on the dollar in the coming days, although risks appear to be pointing somewhat to the upside.”
Euro calm as German PPI falls sharply
In Europe, it traded 0.1% higher at 1.0861, barely moving after falling more than expected in April, down 3.3% year-on-year, mainly due to lower energy prices.
Excluding energy prices, German producer prices were 0.6% lower than in April 2023.
Inflation is falling in the euro zone’s largest economy, something that should help ECB officials agree to a rate cut in June.
“We do not expect major fluctuations today as the data calendars in the eurozone and the US are light,” ING said. “A speech by European Central Bank President Christine Lagarde today at an event honoring Janet Yellen may not be about monetary policy at all.”
rose to 1.2709, trading in a tight range ahead of the release of Britain’s April CPI data on Wednesday, with annual inflation expected to have slowed dramatically to close to the 2% level targeted by the Bank of England.
Yuan and yen remain weak
In Asia, yields traded 0.1% higher at 7.2371, staying within sight of a six-month high, after the People’s Bank left its key lending rate unchanged at a record low earlier this week.
fell 0.1% to 156.17, with the Japanese yen still weak on continued pressure from US interest rates amid uncertainty over the Bank of Japan’s plans to start tightening policy also presented a bleak outlook.
