SINGAPORE- The dollar was on the front foot on Monday ahead of a packed week filled with key economic releases that will provide further clues on the global interest rate outlook, with a US inflation reading taking center stage.
The core personal consumption expenditures (PCE) price index – the Federal Reserve’s preferred measure of inflation – is due on Thursday, where expectations are for a 0.4 percent increase on a monthly basis.
Inflation figures in the euro zone, Japan and Australia also fill the data calendar this week, alongside a rate decision from the Reserve Bank of New Zealand (RBNZ) and PMI readings in China.
Ahead of the releases, the greenback edged broadly higher, pushing the Australian dollar down 0.16 percent to $0.6553, while the New Zealand dollar fell 0.5 percent to $0.6167.
The kiwi had risen 1.2 percent last week, helped by broad dollar weakness and the risk of a rate hike from the RBNZ on Wednesday, though most economists expect the central bank to keep rates steady.
“I think the RBNZ will keep the OCR (official cash rate) unchanged and that will likely cause the kiwi to fall if markets unwind pricing for a near-term rate hike,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia (CBA).
“But any falls in the kiwi will likely be pretty small because we expect the RBNZ to remain pretty hawkish.”
Sterling fell 0.03 percent to $1.26675, while the euro rose 0.02 percent to $1.0823.
Japan’s nationwide consumer prices are due on Tuesday and are forecast to show core inflation slowed to an annual rate of 1.8 percent in January, the lowest since March 2022. – Reuters
