Ahead of the FOMC minutes and Fed speeches, the dollar remains steady


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On Monday, the US dollar started the week steady, amid anticipation of upcoming changes to US interest rates.

Dollar steady in anticipation of Fed minutes and new speakers

Last week, the slowdown in US inflation influenced the dollar by increasing the likelihood of a Federal Reserve interest rate cut this year.

However, the dollar recovered somewhat after several Fed rate-setting committee members expressed the need for greater certainty about the inflation decline, despite April’s moderate inflation.

Consequently, traders will closely focus on the minutes of the Fed’s earlier meeting, scheduled for release on Wednesday, to glean more signals about the timing of anticipated interest rate cuts.

Throughout the week, several Fed officials will speak, including Atlanta Fed President Raphael Bostic, Governors Michael Barr, Christopher Waller, and Philip Jefferson, along with Cleveland Fed President Loretta Mester, New York Fed President John Williams, and Richmond Fed President Thomas Barkin.

Euro quiet ahead of PMI reports

EUR/USD rose 0.1% to 1.0874, slightly below the near two-month high of 1.0895 recorded the previous week.

This week, both the eurozone and the UK will release May PMI data, expected to underscore a slow recovery in the eurozone after six successive quarters of flat or negative growth.

Although the European Central Bank is expected to cut interest rates in June, traders remain uncertain about the number of additional rate cuts, if any, for the rest of the year.

GBP/USD dipped 0.1% to 1.2696 as focus shifted to the UK’s April CPI data, set for release on Wednesday. Economists anticipate that the annual rate of inflation will have slowed markedly to near the Bank of England’s 2% target level.

The next Bank of England meeting is scheduled for June 20, and if cooling price pressures continue, it could prompt officials to consider a rate cut.

Yuan slides after PBOC keeps benchmark rate unchanged

The USD/CNY rose 0.1% in Asia to 7.2315 after the People’s Bank of China maintained its benchmark interest rate at a record low.

Although China’s recent stimulus measures and policy support improved sentiment last week, these efforts did not significantly strengthen the yuan, suggesting that the increased stimulus may be exerting downward pressure on the currency.

Meanwhile, USD/JPY increased by 0.1% to 155.72, as traders remained cautious of the pair exceeding the 156 level, wary of potential government intervention.

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