The dollar rose in European trade on Tuesday against a basket of major rivals, away from recent two-month highs on active short-covering.
The gains come ahead of major US inflation data in February, which will provide fresh pricing for the odds of a US interest rate cut in May or June.
The Index
The dollar index rose 0.1% to 102.93, with a session-low at 102.78, after rising 0.1% yesterday, the first profit in seven sessions away from two-month lows at 102.36.
US Rates
The markets are pricing in a 20% chance of a Fed interest rate cut in May, and a 72% chance of such a cut in June.
Traders are expecting 3 US rate cuts this year, totalling 75 basis points.
Inflation Data
Now traders await major US inflation data for February, expected to impact the path of monetary policies taken by the Federal Reserve.
US consumer prices are expected up 3.1% y/y in February, while core prices are expected up 3.7%.
Obviously hot inflation data will hurt the odds of early US rate cuts this year and boost the dollar further, and vice versa.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
