The dollar remained relatively flat against a basket of major currencies in the early session as the market awaited more speeches from Federal Reserve officials for any clues regarding the outlook for interest rates.
The greenback stabilized following losses mainly against the euro and the Sterling after traders reacted to labor market data in the United States.
Market participants are also turning their attention towards the Michigan Consumer Sentiment Report which is expected later today.
Consumer sentiment worsened in April to 77.2 points, down from March’s 79.4 points, the highest level since July 2021. The market consensus projects a continued decline to 76 points in May. The dollar could remain under pressure if consumer sentiment continues to slide, suggesting a weakening economic outlook.
US yields could also remain under pressure as expectations for a softer monetary policy continue to strengthen. The upcoming week will be busy in terms of economic data, with the release of the Producer Price Inflation report and Fed Chair Powell’s speech on Tuesday, followed by US inflation data on Wednesday.
The dollar could potentially find more support if core inflation for April outperforms the market’s anticipated 0.3%.
