US Dollar steadies ahead of key inflation data euro slips post ECB

FxPremierecom – Telegram Forex Signals – The U.S. dollar steadied in early European trade Friday after gains on the back of strong U.S. growth data, while the euro retreated in the wake of the latest European Central Bank meeting.

FX Signals via Telegram

Best Forex Signals Telegram Channels Top 5 Providers for Big Profits in 2024At 03:50 ET (08:50 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded flat at 103.372, on course for a small weekly gain after climbing about 0.2% overnight.

Fed’s favorite inflation guide due
The dollar has generally retained the positive tone generated by Thursday’s advance U.S. GDP estimate, indicating the U.S. economy grew at a 3.3% annualized rate in the last quarter of 2023, overshooting the consensus forecast of 2% growth.

The data pointed towards a soft landing for the U.S. economy this year after a period of severe monetary tightening. It also showed inflation pressures subsiding further, putting early Fed rate cuts back on the agenda, but the dollar managed to hold up as yields fell.

Later in the session comes the release of PCE price index data, the Fed’s preferred inflation gauge, which could offer more cues on the bank’s plans to cut rates.

The data comes just a few days before the Fed’s first meeting in 2024, where the central bank is widely expected to keep rates on hold.

Euro on backfoot after ECB meeting
In Europe, EUR/USD traded 0.2% lower at 1.0827, with the euro on the backfoot following Thursday’s European Central Bank monetary policy meeting.

The ECB kept interest rates unchanged at a record-high 4%, but the central bank recognised that inflation had fallen faster than it expected last autumn, suggesting that the time to start discussing a first rate cut is fast approaching.

The euro “lurched lower after President Christine Lagarde said she stood by the comments that she made last week that the ECB could cut this summer,” said analysts at ING, in a note.

“The downside for EUR/USD looks open to the 1.0790/1.0800 area now and 1.0875/1.0900 looks like stronger resistance. And risks next week warn that EUR/USD could be a 1.0715/25 story.”

Data released earlier Friday showed that the GfK German consumer sentiment index fell to -29.7 points heading into February from a revised -25.4 the previous month, suggesting a sustained recovery for Europe’s biggest economy remains some way away.

GBP/USD traded 0.1% lower at 1.2693, with the Bank of England set to announce its latest decision on interest rates next week.

Yuan hands back some gains
In Asia, USD/JPY rose 0.1% to 147.82, with the yen slightly lower as data showed consumer price index inflation in Tokyo fell more than expected in January, heralding a similar trend in countrywide inflation.

US Dollar steadies ahead of key inflation data euro slips post ECB

Getting Started in Forex Trading (learn forex online)

Trade better, discover more Forex Signals Strategies
Better Still Sign Up For our FX Signals Daily
Read more on Forex News Today
Download our Forex Signals APP

Join our 21,345  Subscribers Forex Signal Packages!!

Easy Intraday Strategy Candlestick Patterns + RSI

Join our 21,345  Subscribers Forex Signal Packages!!

As seen on Technopedia – Top Forex Signal Providers online

FxPremiere Forex Signals Review

US Dollar edges lower, but remains supported by economic resilience

US Dollar steadies ahead of key inflation data euro slips post ECB