US Dollar closes the week slightly higher as focus shifts to CPI data

With modest gains on Friday, the US Dollar Index, DXY, closed the week marginally higher. In order to assess the state of the US economy and any potential changes to Fed projections, markets are expecting additional economic data. While investors anticipate the next Federal Reserve’s decisions, the value of the dollar is steady.

The US economy is still unstable, and markets are anticipating slower inflation, which will give the Fed the confidence to begin reducing. The US central bank’s executives are still cautious.

San Francisco Fed President Mary Daly emphasizes the need for prolonged restrictive policy to achieve the Fed’s inflation targets. Atlanta Fed President Raphael Bostic hinted at a possible economic deceleration, but the exact timeline for rate cuts remains uncertain. The majority of market predictions foresee rate cuts starting in September, opposing Powell’s dovish indications from last week.

The outcome of April’s Consumer Price Index (CPI) will be key for markets to shape their expectations. The indicators on the daily chart show mixed sentiment, with the Relative Strength Index (RSI) showing a positive slope but remaining in negative territory, suggesting a potential shift in the near future. The Moving Average Convergence Divergence (MACD) also shows no strong impulse from either side. The US Dollar Index (DXY) is trading around the 105.288 mark at the time of writing, up 0.09%, with the American currency holding its ground as markets await further economic reports and Fed decisions.