Dollar Gains Slightly as Markets Await Indicators
The US dollar strengthened after the Presidents' Day holiday, with markets adopting a more cautious stance ahead of this week's string of economic data releases. This strengthening occurred as investors reorganized their positions after a quiet session, while attention shifted to the next interest rate signal from the Federal Reserve.
Chicago Fed President Austan Goolsbee's comments also drew attention after he assessed that tariffs could push up inflation. Although he viewed the impact as potentially temporary, Goolsbee emphasized that time would be needed to determine if the effects truly subsided.
Derivatives markets still tend to project the Fed holding interest rates in March and April, with the possibility of a cut starting in June. However, some players believe that overly aggressive rate cut expectations could be "corrected" if this week's data again shows the economy and inflation remain sufficiently resilient.
Therefore, the focus now turns to the release of inflation, growth, and employment indicators—particularly PCE and GDP—which have the potential to change short-term expectations for US monetary policy. In such a situation, the market tends to move more defensively: the dollar could hold its ground if expectations of a rate cut are lowered, or weaken further if the data reinforces the easing narrative.
Source: Newsmaker.id
