The US Dollar index is hovering around 99.5, showing signs of stabilization following a rebound last week. Investors are exhibiting caution as they await the release of crucial economic data this week, including the April jobs report, first-quarter GDP figures, and the PCE inflation gauge. Market sentiment suggests that weaker-than-expected data could increase the likelihood of earlier interest rate cuts by the Federal Reserve.
- The dollar index fluctuated around 99.5 on Monday after a sharp rebound last week.
- Investors are positioned cautiously ahead of key economic reports.
- Markets are closely watching the April jobs report, first-quarter GDP figures, and the Fed-preferred PCE inflation gauge.
- Weaker-than-expected data could strengthen expectations for earlier interest rate cuts from the Federal Reserve.
- The dollar found support after Trump signaled a willingness to ease Chinese tariffs.
- Beijing exempted certain US goods from its 125% levies.
- Confidence also stabilized after Trump backed off his threat to remove Fed Chair Jerome Powell.
- The dollar strengthened broadly, advancing against all major currencies.
Overall, the dollar’s near-term trajectory appears highly dependent on upcoming economic data releases. Any indication of economic weakness could put downward pressure on the currency, while stronger-than-expected data could provide further support. Recent geopolitical developments, particularly related to trade and Federal Reserve policy, also appear to have influenced investor sentiment and the dollar’s performance.