Dollar drifts lower; euro edges higher ahead of key wages data
Investing.com — The U.S. dollar slipped lower in early European trade Tuesday, but remains close to recent highs given the prospects of higher-for-longer U.S. interest rates, while the euro faces a wages test later in the session.
At 04:45 ET (09:45 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 104.082.
The greenback has edged lower Tuesday with U.S. traders set to return after Monday’s Presidents’ Day holiday, but remained close to three-month highs amid mounting expectations that the Federal Reserve will delay the start of its rate-cutting cycle to the start of the summer compared with the expected March at the beginning of the year.
Data released last week showed both U.S. producer prices and consumer prices increased more than expected in January, while Fed official Mary Daly stated on Friday that there is still «more work to do» to bring inflation back down to the U.S. central bank's 2% target.
The U.S. economic data calendar is largely empty Tuesday, likely resulting in quiet trading ahead of the release of the minutes of the Fed meeting from last month, scheduled for Wednesday.
“The view that the U.S. data will turn at some point, the Federal Reserve will cut, and the dollar will decline remains a consensus one (and often translates into selling USD rallies),” said analysts at ING, in a note.
“We favor a strong dollar in the near term as U.S. data remains supportive, but this looks increasingly to be the perfect recipe for range-bound trading.”
In Europe, EUR/USD traded 0.2% higher at 1.0795, helped data showing the eurozone's current account in a larger than expected surplus in December, pointing to economic recovery.
Traders are now keenly
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