Investing.com – The U.S. dollar traded steadily at the start of the new week on Monday, which should provide more clues about the future path of U.S. interest rates.
At 04:10 ET (0810 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, was trading marginally higher at 104.355, slightly above a five-week low seen earlier in the week.
The dollar is stabilizing ahead of the Fed meeting, there are more speakers
The dollar suffered last week after slowing U.S. inflation raised the prospect of the Federal Reserve cutting interest rates this year.
There was some recovery as several Fed officials, especially members of the bank’s rate-setting committee, said they needed much more confidence that inflation was falling beyond some easing in inflation in April.
That puts the Federal Reserve’s meeting earlier this month on Wednesday into focus as traders look for more clues about when the U.S. central bank will start cutting interest rates.
Several Fed officials are also scheduled to speak during the week, including Atlanta Fed President, Governor Michael Barr, Cleveland Fed President, New York Fed President and Richmond Fed President.
Euro calms down ahead of PMI release
In Europe, trading rose 0.1% to 1.0874, just below a nearly two-month high of 1.0895 hit last week.
The eurozone, like the UK, is set to release May PMI data this week and should highlight that the eurozone’s slow recovery appears to be well underway after six straight quarters of stagnant or negative growth.
The central bank is expected to cut interest rates in June, but traders remain unsure how many more cuts the central bank will agree to during the rest of the year.
fell 0.1% to 1.2696, taking into account April UK data on Wednesday, and economists expected annual inflation to slow sharply to near 2%, the Bank of England’s target.
The next meeting is on June 20, and evidence of a steady decline in price pressures could prompt officials to agree to cut interest rates.
Yuan falls after PBOC keeps base rate unchanged
In Asia, shares traded 0.1% higher at 7.2315 after the benchmark lending rate remained unchanged at a record low.
While sentiment towards China has improved over the past week on the back of increased stimulus and policy support from Beijing, the yuan has not strengthened as increased stimulus at home pointed to more downward pressure on the currency.
rose 0.1% to 155.72, with traders remaining cautious about the pair breaking above 156 amid some concerns it could prompt further government intervention.