© Reuters.
By Peter Nurse
Investing.com – The US dollar rose in early European trade on Monday, but was on track for a second straight monthly loss ahead of the release of more economic data that is likely to shed more light on the future path of interest rates.
At 02:55 ET (06:55 GMT), which measures the greenback against a basket of six other currencies, it was trading slightly higher at 101,575, but was still on track for a monthly loss of about 1%, after falling more than 2% in March.
Concerns that the US economy is heading for a sharp slowdown have weighed on the dollar index recently, after it reached a 20-year high late last year.
It is widely expected to raise interest rates by another 25 basis points at next week’s policy-setting meeting as inflation proved more steady than expected, but focus will be on what happens next amid growing expectations that the central bank will begin an easing cycle. this year.
The US data calendar is largely blank on Monday, but first quarter data will be studied carefully on Thursday. The reading is expected to show that growth slowed from the previous quarter.
Also due later this week is the Fed’s preferred measure of inflation, which is expected to show that inflation remained stubborn through March.
It fell 0.1% to 1.0978, ahead of the release of the widely watched German report, which is expected to show a slight improvement in business confidence in April.
Data released on Friday showed that business activity in the eurozone picked up pace in April, easing concerns about an impending recession in the region.
The Eurozone is scheduled to release advance data for the first quarter on Friday and is expected to show slight growth in the quarter, while inflation reports for April from the region’s largest economies are likely to indicate continued high inflationary pressures.
It decreased by 0.1% to 1.2419, and decreased by 0.3% to 0.6671, while it rose to 134.19, ahead of Friday’s policy meeting – the first under new governor Kazuo Ueda.
Ueda is expected to keep the bank’s ultra-loose policy for the time being, but it could provide signs of a final plan to tighten, especially since inflation remains elusive.
It rose 0.1% to 6.9017 amid uncertainty about the extent and speed of China’s economic recovery.