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The dollar index continued its rise, nearing a multi-week high, however traders could be more cautious as they anticipate new economic data this week.
Investors are closely watching the upcoming U.S. PCE price index report on Friday for insights into the Federal Reserve’s monetary policy trajectory.
Expectations that U.S. interest rates may stay elevated compared to other major economies could continue to support the greenback, driving traders to seek refuge in the dollar to benefit from yield differentials. In addition, Thursday will see traders focus on the release of the U.S. GDP Growth Rate QoQ Final Q4 figures, with market consensus projecting a decrease to 3.2% from the previous reading of 4.9%.
A lower-than-expected GDP figure could dampen the dollar’s recent rally and bolster interest rate cuts expectations. However, all eyes will be on Friday’s speech by Fed Chair Powell, which has the potential to introduce volatility in the market.
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