Dollar edges lower ahead of key data; ECB meeting looms large
Investing.com — The U.S. dollar drifted lower in early European trading Monday, at the start of a week that includes key U.S. growth and inflation data as well as the first major central bank meetings of the new year.
At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 102.984, retreating from recent one-month highs.
The greenback ended last week on the up as signs of resilience in the U.S. economy prompted traders to rein in expectations of early interest rate cuts by the Federal Reserve.
However, the new week has started with traders banking some profits ahead of the release later in the week of fourth-quarter growth numbers as well as a key U.S. inflation reading.
The government is scheduled to release data on fourth quarter GDP on Thursday, which is expected to come in at 2.0% after a 4.9% increase in the prior quarter.
“Our macro team forecasts above-consensus fourth quarter GDP,” said analysts at ING, in a note. “This could see the market further pare back Federal Reserve easing expectations this year. The market currently attaches a 43% chance of a cut in March and an easing cycle this year now worth 115bp.”
December's personal consumption expenditures data is also due on Thursday, and comes after the consumer price index increased 2.6% in the 12 months to November and monthly prices fell for the first time in more than three and a half years.
In Europe, EUR/USD traded largely unchanged at 1.0896, as the attention turns to the European Central Bank’s policy-setting meeting on Thursday.
The ECB is certain to keep rates steady, having stopped hikes in October, but investors will be carefully studying the associated comments from
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