Mar 29 2024: In the financial markets, the dollar showed strength against the euro on Thursday in anticipation of significant U.S. inflation data scheduled for release on Friday. This movement coincided with investors adjusting their positions as the month and quarter approached their end.
The Japanese yen also exhibited a slight weakness, with the dollar trading at 151.38 per yen. Earlier in the week, the yen had neared the 152 mark, its weakest level since 1990, prompting discussions among Japan’s top monetary officials about potential interventions to stabilize its value.
The upcoming focus in the U.S. economic calendar is the release of Personal Consumption Expenditures (PCE) data on Friday. This data follows previous reports showing higher-than-expected consumer and price inflation figures for January and February. Market participants are keenly observing these developments for insights into the Federal Reserve’s monetary policy trajectory, particularly regarding potential interest rate cuts in the coming months.
Helen Given, an FX trader at Monex USA, mentioned that while inflation has been higher than expected in the early months of the year, she believes this trend is temporary, maintaining the view that the Fed will proceed with three 25 basis points rate cuts in 2024.
The dollar’s earlier rally was partly attributed to comments from Fed Governor Christopher Waller, who emphasized the rationale for the central bank to hold off on rate cuts amid disappointing inflation data.
With U.S. Treasuries and stock markets closed for the Good Friday holiday, foreign exchange markets are expected to have lower activity, potentially leading to increased volatility.
On the international front, attention is also on Japan’s response to its currency’s weakness, with discussions about possible interventions if the yen’s decline is deemed excessive. Similar concerns are present in China, where efforts are being made to stabilize the yuan amid recent fluctuations.
In the cryptocurrency market, bitcoin recorded a 2.91% gain, reaching $70,848.75.