The dollar index recovered from earlier losses to hover around 106.6 on Monday, trading flat after hitting a two-month low last week.
Dollar wavers, GDP and PCE awaited
Investors remain cautious about the U.S. economic outlook following Friday’s flash S&P Global PMI data, which unexpectedly showed a contraction in the services sector despite stronger manufacturing growth. The report also highlighted rising input costs and weaker business confidence amid growing uncertainty over government policies, prompting traders to increase bets on Federal Reserve rate cuts this year.
Attention turns to upcoming economic data release
As the market digests these signals, attention is now turning to upcoming economic data releases, including the PCE inflation report and the second estimate of Q1 GDP growth, both of which could provide fresh insights into the health of the economy and influence monetary policy expectations. Additionally, comments from multiple Fed officials throughout the week will be closely scrutinized for any indications of the central bank’s stance on interest rates, inflation, and overall economic conditions. Traders and investors will also be monitoring global market trends, geopolitical developments, and bond market movements, which could further shape sentiment toward the dollar in the coming weeks.
