Dollar Set for Weekly Gain Ahead of Key Inflation Data
The U.S. dollar eased slightly on Friday, taking a breather after a strong rally this week as traders awaited the release of the Fed’s preferred inflation gauge.
At 4:40 AM ET (09:40 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading 0.2% lower at 107.960, after rising to a two-year high earlier this week.
Dollar Set for Weekly Gain
The dollar index dipped slightly on Friday, but was still headed for a weekly gain of around 1%, supported by a relatively hawkish outlook for U.S. interest rates after the Federal Reserve’s final policy meeting of the year earlier this week.
U.S. central bank policymakers now see only 50 basis points of additional easing in 2025, likely two cuts of 25 basis points, instead of the four reductions indicated in their previous forecast in September. The core PCE index is expected to rise 2.9% on an annualized basis in November, up from 2.8% in the previous month, while the monthly reading is expected to rise 0.2%, down from 0.3% in October.
A stronger-than-expected rise in the core PCE index could have a big impact on markets, as the aggressive nature of Fed comments has shifted the odds toward fewer or potentially no taper next year.
Source: Investing.com
