Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

Dollar stabilizes ahead of PCE inflation data; euro awaits eurozone CPI release

Published Aug 31, 2023 08:18
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
EUR/USD
-0.02%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/CNY
-0.02%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/JPY
-0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GBP/USD
-0.00%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Investing.com - The U.S. dollar stabilized in early European trade Thursday, after hefty losses this week as signs of a cooling U.S. economy pointed to limited headroom for the Federal Reserve to keep raising interest rates. 

At 03:10 ET (07:10 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 103.162, after dropping nearly 1% so far this week.

Dollar weakened on soft employment data 

The greenback has weakened this week, pulling back from a near three-month high, on indications of cooling spending and hiring in the U.S., prompting traders to pare bets for further interest rate hikes by the Federal Reserve this year.

The focus is now squarely on personal consumption expenditures and nonfarm payrolls data, due later in the session and then on Friday, for more cues on the U.S. economy and monetary policy.

That said, the dollar is still on course for gains of around 1% in August, fuelled by an expectation that interest rates linger longer at elevated levels.

“Second-tier US jobs data (JOLTS and ADP) have seen the dollar soften a little this week,” said analysts at ING, in a note. “However, the data have yet to prove the smoking gun that can mark the end of the Federal Reserve's hawkish stance.”

“Stronger trends will only start to develop should we see a large downside miss on tomorrow's release of the August NFP jobs data or a sharp rise in the unemployment rate. That would undermine the thesis that strong employment consumption can keep the Fed in hawkish mode for a lot longer than most think,” ING added.

Euro slips ahead of eurozone CPI release

EUR/USD fell 0.2% to 1.0903, after gaining 0.4% on Wednesday when higher-than-expected inflation numbers in Germany and Spain raised the pressure on the European Central Bank to keep lifting interest rates.

The eurozone CPI is expected to rise 5.1% on an annual basis in August, a slight cooling from July’s 5.3%, but Wednesday’s data pointed to potential upside. 

Meanwhile, German retail sales slumped 0.8% on the month in July, an annual drop of 2.2%, data showed earlier Thursday, illustrating the damage the ECB’s aggressive monetary policy tightening was having on the region’s largest economy. 

Yuan slips after Chinese PMI releases

Elsewhere, USD/CNY rose 0.1% to 7.2898 after PMI data released earlier Thursday showed that China’s manufacturing sector contracted for a fifth straight month in August, albeit at a smaller-than-expected pace, while non-manufacturing activity missed expectations.

The readings presented little improvement in Asia’s largest economy, as it grapples with slowing demand and a potential real estate crisis. 

GBP/USD fell 0.1% to 1.2706, after gaining overnight as the dollar weakened, while USD/JPY fell 0.2% to 145.91, with the yen buoyed by stronger-than-expected retail sales data for July, although industrial production shrank more than expected.  

 

Dollar stabilizes ahead of PCE inflation data; euro awaits eurozone CPI release
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email