The US dollar was mostly flat against a basket of major currencies on Tuesday after US economic data failed to support expectations for a June or July Federal Reserve interest rate hike. The dollar index, which measures the greenback against a basket of six major currencies, was last nearly unchanged at 95.564, down from a two-month high of 95.968 hit on Monday. The euro hit a session high of $1.1173, up from a more than 10-week low of $1.1096 hit on Monday.
The dollar index remained on track for its biggest monthly increase in six months in May, of about 2.7 percent, boosted by a jump in expectations in recent weeks of a near-term Fed rate increase. The dollar was set for its biggest monthly gain against the yen in 1-1/2 years, of about 4.3 percent. The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, rose 0.2 percent last month after edging up 0.1 percent in March. In the 12 months through April the core PCE rose 1.6 percent, matching its increase in March. The core PCE is the Fed's preferred inflation measure and is running below the US central bank's 2 percent target.
Analysts said the latest reading, which they considered the most important economic data released on Tuesday, did not support bets on a June or July Fed rate hike by failing to show improvement or beat expectations. "We need a preponderance of US data to beat expectations for rate hike expectations to increase," said Greg Anderson, global head of FX strategy at BMO Capital Markets in New York.
Comments
Comments are closed.