Euro Under Pressure, Dollar Grows Confident Ahead of US Data
The US dollar held steady on Wednesday, as markets adopted a "wait and see" mode ahead of a series of US economic data that could alter expectations for the Fed's interest rate direction. The dollar index (DXY) hovered around 98.2 (around 98.25) as investors viewed employment and economic activity data as key determinants of the dollar's direction, overriding recent geopolitical issues.
Foreign exchange movements were relatively limited as markets awaited key data releases—from labor and job openings indicators to the Non-Farm Payrolls (NFP) report on Friday. Amid this anticipation, market participants still tended to believe the possibility of a Fed rate cut remains present this year, but the timing depends heavily on the strength of the data.
In Europe, the euro weakened slightly, holding around 1.168 against the dollar (around 1.1682), after previously being pressured by softer inflation data. Weak inflation has led markets to slightly reduce speculation of tighter long-term policy, preventing the euro from gaining momentum for a strong rebound.
Meanwhile, the US dollar weakened slightly against the yen, with USD/JPY trading around 156.5–156.6 (around 156.47). Asian geopolitical issues, such as China's restrictions on dual-use exports to Japan, did make headlines, but their impact on the foreign exchange market was considered limited compared to the US data agenda.
In the commodity currency bloc, the Australian dollar remained strong in the 0.673–0.676 (around 0.6735–0.6764) range amid expectations that interest rate policy could remain tight, while the New Zealand dollar hovered around 0.578–0.579 (around 0.5788).
Source: Newsmaker.id
