The US dollar (USD) has experienced a decline as the new week commences, prompting economists at ING to delve into the currency‘s outlook.
With no scheduled Federal Reserve speakers anticipated for today, market focus shifts towards key data releases in the United States. Following a positive Chicago Fed Activity index reading, attention is drawn to soft manufacturing figures, particularly the Dallas Fed index, along with lower-than-expected new home sales recorded on Monday. Expectations center on a rebound in Durable Goods Orders for February following a decline in January, while the Conference Board consumer confidence index is forecasted to stabilize after registering 106.7 in February.
Despite the absence of scheduled Federal Reserve speakers, equity markets have displayed a negative response to remarks made on Monday by Raphael Bostic, who reiterated expectations for only one interest rate cut this year and underscored the risks associated with premature easing. Interestingly, the US dollar did not reap benefits from Bostic’s comments. ING analysts speculate that while a core Personal Consumption Expenditures (PCE) reading of 0.3% month-on-month (in line with their forecast and consensus) on Friday might not significantly encourage dovish positioning, the US dollar appears more inclined to stabilize rather than initiate another rally at this juncture.
