The Dollar Index (DXY) hit a new low not seen since July on Thursday. The economists of MUFG Bank analyze USD outlook ahead of US inflation data PCE United States.
Selling the Dollar could be more difficult from a fundamental perspective
A consensus increase in the core PCE month-on-month inflation rate today (0.2%) will likely mean that the annualized gain in 6 months will fall to the Fed’s 2% target level and will be another clear indication that the inflation problem and The view that underlying inflationary pressures were “persistent” is no longer the case.
A benign data today confirming, for example, that the six-month annualized core PCE rate has reached the 2.0% target will undoubtedly reinforce the prospect of the Fed cutting rates as early as March. However, this is already almost discounted, at 23/24 basis points, so it is difficult to foresee a big rate move today.
Although the dollar could weaken further due to momentum and positioning in a low volume market, from a fundamental perspective it could be more difficult to continue selling dollars.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
