The US dollar remained in an uncertain direction, extending the trend recorded during the past few days, as markets await further economic data releases.
Traders could remain cautious ahead of the release of US inflation data tomorrow as they could continue to gauge the potential next moves of the Federal Reserve. Expectations of a start in interest rate cuts in March have been moderating and could continue to change with new data coming in.
The Euro is seeing narrow fluctuations alongside the dollar, amid ongoing uncertainty. The EU economy remains under pressure and continues to see a decline in industrial production in Germany.
The current economic conditions could prompt the European Central Bank (ECB) to consider an early rate cut and could weigh on the European currency, although the rebound in inflation could counterbalance economic consideration to a certain extent.
The British pound continued to see risks while economic conditions remained difficult and the Bank of England maintained its stance regarding interest rate levels.
The Bank of England could come under increasing pressure to lower rates although elevated inflation levels could constitute an obstacle. Today’s speech by Andrew Bailey, the BoE Governor, could affect the currency’s direction in addition to the economic data releases expected on Friday.
The Japanese yen continued to decline against the Dollar for a second day. The yen could remain under pressure with inflation rates falling, dampening expectations that the Bank of Japan could shift away from negative interest rates as soon as previously anticipated.
