The U.S. dollar index stands still and waits for the PCE price index to indicate the direction. The U.S.-Japan exchange rate fell below 156. Provided by Investing.com

Investing.com – In the European market on Friday (26th), the U.S. dollar showed no obvious trend. Investors are waiting for important U.S. inflation data, especially the Federal Reserve’s interest rate meeting next week. The data released today can be We hope to help the market evaluate future interest rate policies.

As of 17:58 Beijing time (05:58 a.m. Eastern Time), the U.S. dollar rose 0.04% against six trade-weighted major currencies to report at 105.495; it rose 0.03% to 105.63.

The benchmark U.S. bond yield was at 4.689%, at 4.912%.

DollarThe market outlook needs to pay attention to PCEPrice Index

Data released on Thursday (25th) showed a growth of 1.6%, far lower than the expected 2.4%. The report also showed that the quarterly PCE price index reached an annual rate of 3.7%, higher than the expectation of 3.4%.

Over the past few weeks, Fed officials have made it abundantly clear that they remain concerned about inflation, dissipating expectations of an early interest rate cut.

Market attention now turns to the March Personal Consumption Expenditures (PCE) price index due out later today, the Fed’s favorite inflation gauge.

“The main drivers in FX markets are pointing to a stronger dollar: higher U.S. Treasury yields, wider dollar-friendly swap spreads, and lower equities,” ING analysts said in a note.

“If core personal consumption expenditure reaches 0.4% month-on-month today, the market is likely to further reduce the extent of U.S. interest rate cuts.”

Eurozone consumer inflation expectations fall slightly

rose 0.07% to 1.0736.

The European Central Bank’s consumer expectations survey showed that euro zone consumers expect inflation to be 3.0% in the next 12 months, slightly lower than the 3.1% expected a month ago and the lowest since December 2021.

However, inflation expectations for the next three years remained stable at 2.5% for the fourth consecutive month, above the European Central Bank’s 2.0% target.

The European Central Bank plans to cut interest rates in June, but future prospects are still affected by rising energy costs, high service sector inflation and geopolitical tensions.

rose 0.04% to 1.2517.

“The Bank of England’s policy meeting on May 9 is clearly the next big event for sterling, but given the divided opinion of the Monetary Policy Committee, the data may be more important,” ING said.

USD/JPY hits 34New high for the year

It rose 0.65% to 156.67, breaking through the 156 level and hitting a 34-year high after the Bank of Japan kept interest rates unchanged after a historic rate hike in March.

The Bank of Japan also predicts higher inflation in the coming years, but it also expects economic growth to weaken, raising questions about how much room the Bank of Japan has to continue raising interest rates.

Meanwhile, Japan’s consumer price index (CPI) released earlier on Friday was weaker than expected, further reinforcing doubts about the Bank of Japan’s hawkish stance.

It rose 0.11% to 7.2470; it rose 0.08% to 7.2608. reported 2.205%.

Elsewhere, it rose 0.34% to 0.6538, supported by strong Australian Producer Price Index (PPI) inflation data. The data, combined with CPI data from earlier this week, prompted bets that Australian interest rates will be higher for longer.

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Compiler: Liu Chuan

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