"The US dollar was relatively stable on Friday, trading close to a one-month high and positioning for a weekly gain that reverses the prior week's decline. The move has been reinforced by a broad rise in treasury yields during the last few days, reflecting stronger labour data and Federal Reserve minutes that highlighted a committee still debating the appropriate pace of policy adjustment."
"Weekly jobless claims fell to a five-week low, signalling continued labour market tightness, while the Philadelphia Fed's business outlook index surprised to the upside, reaching its strongest level in several months. These indicators suggest that economic momentum remains intact, underpinning higher yields. However, the near-term trajectory now hinges on today's PCE inflation release, alongside preliminary GDP and S&P PMI readings."
"The PCE is expected to remain steady to some extent, but any renewed disinflation could revive expectations of a more accommodative Fed, weighing on both yields and the dollar. Conversely, confirmation of resilient growth and persistent price pressures would likely sustain upward pressure on yields and extend the currency's gains. Currently, markets continue to price two rate cuts this year."
The US dollar traded near a one-month high and was set for a weekly gain that reversed the prior week's decline. A broad rise in Treasury yields over recent days reinforced the currency's move, driven by stronger labour data and Federal Reserve minutes showing the committee still debating the appropriate pace of policy adjustment. Weekly jobless claims fell to a five-week low and the Philadelphia Fed's business outlook index reached its strongest level in months, indicating ongoing economic momentum. The near-term trajectory depends on PCE inflation, preliminary GDP, and S&P PMI readings, which could shift expectations for Fed accommodation and influence yields and the dollar.
Read at London Business News | Londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]