Dollar firm ahead of global inflation data
dollar made a steady start to the week, as investors were focused on U.S., European and Japanese inflation data to guide the global interest rate outlook.
Foreign exchange trade has been dominated by the hunt for «carry» in recent months, punishing low-rate currencies and supporting the dollar while U.S. data has blown hot and cold and dented policymakers' confidence on the rates outlook.
Several major pairs have hugged tight ranges. The euro, which gained 0.9% on the dollar last week, was in the middle of a range it has held for more than a year at $1.0846. Trading on Monday was thinned by holidays in Britain and the United States.
German inflation on Wednesday and euro zone readings on Friday will be watched for confirmation of a European rate cut that traders have priced for next week.
Sterling was testing the top side of a range it has held this year at $1.2735. The Australian and New Zealand dollars have eased from recent highs, leaving the Aussie at $0.6626 and the kiwi at $0.6122 as markets have dialled back interest rate cut expectations for the U.S.
Friday's reading for the core personal consumption expenditures price index, the Federal Reserve's preferred inflation measure is expected to be steady month-on-month, so a surprise either way could move currency markets.
The dollar had fallen back after data showed a slowdown in consumer price rises in April and disappointing retail sales, before strengthening last week thanks to better-than-expected PMI survey data.
«Focus on core PCE revolves around
