TOKYO- The dollar inched up as traders brushed off US manufactured goods data and awaited the Federal Reserve’s preferred measure of inflation for clues on when the central bank may start cutting interest rates.
Meanwhile, the Reserve Bank of New Zealand (RBNZ) held the cash rate steady and issued commentary seen as dovish, sending the kiwi tumbling to over a one-week low.
The Aussie was also hanging near its lowest in over a week after inflation data came in softer than expected, reinforcing expectations that domestic interest rates are unlikely to increase further.
In the US orders for durable goods fell 6.1 percent last month, data showed on Tuesday, exceeding the 4.5 percent decline forecast by economists polled by Reuters.
However, markets were unfazed by the manufacturing figures, with eyes on US core personal consumption expenditures (PCE) price index due on Thursday. Forecasts are for a 0.4 percent gain.
Markets have largely priced out a rate cut at both the Fed’s March and May meeting, CME’s FedWatch Tool showed. The chance of a cut in June sits around 51 percent .
With market expectations more closely aligned with the Fed’s latest projections and comments, traders would only respond if they see a trend break in tier one data, especially anything “hinting at growth weakness,” said Charu Chanana, head of currency strategy at Saxo.
The focus now shifts to Eurozone inflation on Friday, Chanana said.
The US dollar index which measures the currency against a basket of peers, was last up 0.14 percent at 103.98. – Reuters
