The U.S. dollar steadied in early European trade Monday, but remained elevated at the start of a week dominated by key inflation releases, including the Federal Reserve's favorite gauge.
At 04:05 ET (09:05 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded marginally lower at 103.832, having bounced from the 103.43 level seen at the end of last week, the lowest since Feb. 2.
The dollar recorded its first weekly loss in 2024 last week, but remained within sight of three-month highs, as a chorus of Federal Reserve officials warned that the bank was in no hurry to begin trimming interest rates early, especially as inflation remained sticky.
PCE price index data, which is the Fed's preferred inflation gauge, is set to provide more cues on inflation this week, amid expectations for a 0.4% increase on a monthly basis.
Several more Fed officials are also expected to speak this week and likely reiterate the outlook of higher-for-longer interest rates.
In Europe, EUR/USD traded 0.2% higher at 1.0835, with the euro posting small gains ahead of Friday's closely watched eurozone inflation data, the last such reading before the upcoming European Central Bank meeting on March 7.
Economists are expecting an annual reading of 2.5% for February, dropping from 2.8% in January, moving back towards the ECB's 2% target after soaring to double digits in 2022.
Inflation reports from Germany, France and Spain are due on Thursday, ahead of the main release.
GBP/USD traded 0.1% lower at 1.2672, with sterling still hit by the drop in U.K. consumer confidence at the end of last week.
U.K. inflation continues to run at levels above the Bank of England's 2% medium-term target, suggesting the BOE is still likely to lag the Federal Reserve and the European Central Bank when it comes to rate cuts.
In Asia, USD/JPY traded 0.1% higher to 150.59, with the yen still well above the 150 level and remaining close to three-month lows.
Focus this week was squarely on Japanese consumer price index data for January, due on Tuesday. The reading is expected to show core inflation falling within the Bank of Japan's 2% annual target range, giving the central bank even less impetus to begin aggressively tightening policy.
Source : Investing.com
