By Peter Nurse
Investing.com – The US dollar gains positions at the start of trading on Monday in Europe, but is on track for a second consecutive monthly loss as more economic data is released that is likely to shed more light on the future path of interest rates.
By 08:55 AM ET (0855 GMT), the , which tracks the currency against a basket of six other major currencies, is up slightly at 101.575 but remains on track for a monthly loss of around 1%, after fall more than 2% in March.
Concerns that the US economy is heading for a sharp slowdown have weighed on the dollar index of late, after hitting a 20-year high late last year.
The signs are that he will raise rates another 25 basis points at next week’s policy meeting as inflation has turned out to be stronger than expected, but the focus will be on what happens next, given the rising expectations that the central bank will begin an easing cycle this year.
The US data calendar is virtually empty this Monday, but first quarter data will be closely scrutinized on Thursday. The reading is expected to show that growth has slowed from the previous quarter.
The , the Federal Reserve’s favorite inflation gauge, will also be released this week, and is expected to show that inflation held firm through March.
The pair is down 0.1% to the 1.0978 level, awaiting the release of the report from Germany, which is expected to show a slight improvement in business confidence in April.
Those published on Friday showed that business activity in the euro zone had picked up in April, reducing concerns about an impending recession in the region.
The eurozone will publish its preliminary data on the first quarter on Friday, which is expected to indicate a small quarterly growth, while the April inflation reports of the main economies of the region, , and , probably suggest that inflationary pressures continue being elevated.
The pair falls 0.1% to the 1.2419 level, the pair falls 0.3% to 0.6671, while it rises to 134.19, ahead of the monetary policy meeting to be held on Friday, the first under the new governor Kazuo Ueda.
Ueda is expected to maintain the bank’s ultra-loose monetary policy for now, although it could hint at an eventual tightening plan, especially if inflation remains persistent.
The pair points up 0.1% to the 6.9017 level, amid uncertainty about the extent and speed of China’s economic recovery.