Currencies hold tight ranges as market awaits more U.S. rate cues
sterling trading just off multi-year highs, as markets focussed on clues to the size of a widely expected U.S. interest rate cut next month.
Cryptocurrency bitcoin took the early Asia spotlight, dropping over 6% after breaking below support around $60,000.
But overall moves in the foreign exchange market were muted as traders awaited fresh hints on the state of the world's largest economy.
Investors are unanimous in bets that the Federal Reserve will begin cutting interest rates next month following Chair Jerome Powell's dovish tilt last week, with the debate now centred on whether or not it will be a super-sized 50-basis point cut.
The current pricing sits at a 36% chance for the larger cut, up from 29% a week ago, according to the CME Group's FedWatch Tool.
Markets, which are fully priced for a 25-basis point cut next month, see just over 100 basis points worth of easing by the end of the year.
A preliminary estimate for U.S. gross domestic product in the second quarter is due later this week, along with the Fed's preferred inflation measure the personal consumption expenditures (PCE) index.
But with attention shifting from inflation to the strength of the economy, the importance of this week's PCE data is «debatable,» said Matt Simpson, senior market analyst at City Index.
«It will require a strong upside surprise to dispel expectations of multiple Fed cuts.»
The dollar index, which measures the greenback against a basket of currencies, was last 0.02% higher at 100.61, hovering above a 13-month low of
