Dollar Takes a Breather as Inflation Numbers Loom
Monday’s open saw the greenback hit a snag after last week’s rally. Traders are holding their breath, waiting for the Fed’s most important inflation gauge – the February PCE price index – set to drop on Friday.
What the Numbers Mean
- Core PCE MoM expected to slip to 0.3% from January’s 0.4%. A softer read could nudge the dollar lower in the near term.
- Durable Goods Orders, slated for release tomorrow, look up 1% versus a bleak –6.1% in January. That optimism might cushion the greenback.
Euro Gets a Smooth Ride
While the dollar is dawdling, the euro is riding a gentle wave thanks to Christine Lagarde’s last week talk. She reminded everyone that ECB policy is data‑driven and warned against “pre‑set” rate paths. That message has steadied the euro.
But the money markets are already pricing in several rate cuts, spurred by the twin forces of easing inflation and soft economic growth.
Lagarde’s Speech to Watch
Lagarde is slated to speak today. Market eyes are on her to pick up any telltale signs of further cuts – anything that could pull the euro down.
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