Investing.com – The US dollar traded steady on Monday, at the start of a new week that will provide more clues about the future path of US interest rates.
At 04:10 ET (08:10 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading marginally higher at 104.355, marginally above its five-week low earlier this week.
Dollar Holds Stable Ahead of Fed Minutes, More Speakers
The dollar took a hit last week after a slowdown in US inflation raised the likelihood of a Federal Reserve rate cut this year.
There was talk of a rebound of sorts, as several Fed officials, particularly members of the bank’s rate-setting committee, said they needed much more confidence that inflation would fall barring any easing of inflation in April.
This puts the Fed’s meeting early this month, scheduled for Wednesday, firmly in focus, as traders look for more clues about when the US central bank will start cutting rates.
Several Fed officials will also speak this week, including the president of the Atlanta Fed, Governors Michael Barr and the president of the Cleveland Fed, the president of the New York Fed and the president of the Richmond Fed.
Rest on the euro before the PMIs
In Europe, it traded 0.1% higher at 1.0874, just below a nearly two-month high of 1.0895 reached last week.
The eurozone, as well as the UK, will release May PMI data this week, and should highlight that a slow recovery appears to be underway in the eurozone after six consecutive quarters of stagnant or negative growth.
Rates are widely expected to be cut in June, but traders remain uncertain about how many, if any, cuts the central bank will agree to over the rest of the year.
fell 0.1% to 1.2696, highlighting Wednesday’s April UK data, with economists expecting annual inflation to have slowed dramatically to close to the 2% level targeted by the Bank of England.
The next meeting is on June 20 and evidence of a continued cooling of price pressures could prompt officials to agree to a rate cut.
The yuan falls after the PBOC keeps benchmark interest rates unchanged
In Asia, it traded 0.1% higher at 7.2315 after the country left key lending rates unchanged at record lows.
While sentiment towards China improved last week on the back of more stimulus and policy support from Beijing, the yuan saw little strength as increased stimulus in the country pointed to more downward pressure on the currency.
rose 0.1% to 155.72, with traders remaining cautious about taking the pair past the 156 level amid some concerns that this could attract more government intervention.
