Dollar retreats ahead of PMI data; euro, sterling gain
Investing.com — The U.S. dollar retreated in early European trade Thursday, with risk sentiment boosted by Nvidia’s stellar earnings, with traders awaiting the release of key business activity surveys for clues of the health of the global economy.
At 04:10 ET (09:10 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.4% lower to 103.472, down approaching 1% so far this week.
Strong earnings from AI darling Nvidia (NASDAQ:NVDA) have boosted global confidence, resulting in a hit to the safe haven dollar to the benefit of the more cyclical currencies.
The greenback has come off highs this week, but remained more than 2% higher for the year, as traders pared back aggressive bets for a slew of rate cuts by the Federal Reserve this year.
The minutes of the Fed’s late-January meeting, released on Wednesday, showed that the bank was in no hurry to reduce interest rates in the near-term. Addresses from several Fed officials this week also reiterated this hawkish stance, with policymakers citing concerns over sticky inflation.
Attention now turns to the release of weekly unemployment data and, more importantly, the manufacturing and services PMI data for February, for a gauge of the underlying strength of the economy.
“Our game plan here sees the dollar staying bid for the next couple of weeks — we should get a strong January core PCE release on February 29th — and then turning lower in March on what should be a softer payrolls report and a softer February CPI figure,” said analysts at ING, in a note.
In Europe, EUR/USD rose 0.5% to 1.0869, with the euro helped by the more positive investment environment.
The latest PMI data out of Europe showed that the German economy
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