Dollar firm with eyes on PCE data, kiwi calm before RBNZ decision
U.S. dollar held steady as traders brushed off durable goods data overnight and awaited the Federal Reserve's preferred measure of inflation due Thursday for clues on when the U.S. central bank may start cutting interest rates.
The Reserve Bank of New Zealand's (RBNZ) interest rate decision later in the Asian morning also has market participants on edge, with the New Zealand dollar calm ahead of what could turn out to be a significant policy meeting.
In the U.S., the Commerce Department's Census Bureau said orders for durable goods fell 6.1% last month, exceeding the 4.5% decline forecast by economists polled by Reuters.
The data did not seem to faze the market, with all eyes on the U.S. core personal consumption expenditures (PCE) price index due on Thursday. Forecasts are for a rise of 0.4%.
«FX markets appear to be taking a nap in the run up to the core PCE print later in the week,» said Charu Chanana, head of currency strategy at Saxo.
Markets have largely priced out a rate cut at both the Fed's March and May meeting, CME's FedWatch Tool showed, following strong U.S. consumer and producer price data. The chance of a cut in June sits around 51%.
The U.S. dollar index, which measures the currency against a basket of peers, hovered around 103.82.
With market expectations more closely aligned with the Fed's latest projections and comments, traders would only respond if they see a trend break in tier one data, «particularly hinting at growth weakness,» said Chanana.
«Meanwhile, the focus will be outside the
