The dollar index declined to a certain extent while market participants awaited the release of the monthly Personal Consumption Expenditures Price Index (PCE) scheduled for Thursday as well as other economic data releases throughout the week.
A significant increase in the PCE Price Index could prompt the Fed to tighten its stance on monetary policy and could further undermine markets’ expectations for an interest rate cut, potentially strengthening the U.S. dollar.
The Euro ticked slightly higher against the dollar while market participants anticipate ECB President Lagarde’s speech today.
Traders could remain cautious as they look for additional data before next week’s European Central Bank monetary policy meeting.
As a result, the euro could strongly react to the Euro Zone, German and French inflation data releases expected later this week.
