(MENAFN) On Tuesday, the dollar experienced a decline, encountering some downward pressure as the yen saw a slight uptick, driven by ongoing efforts from Japanese government officials to support the currency. This dynamic led to a strengthening of other currencies against the dollar, with the New Zealand dollar rising from its four-month low to reach USD0.5999 in recent trading. Similarly, the British pound also rebounded, climbing to USD1.2636, moving away from its one-month low of USD1.25755 recorded last week.
With a relatively sparse economic calendar this week, market attention has turned to the upcoming release of the US Personal Consumption Expenditures (PCE) index. As the preferred inflation gauge of the Federal Reserve, the PCE index has the potential to shape expectations regarding US interest rates. Analysts anticipate a 0.3 percent increase in the US core PCE price index for February, which would maintain the annual rate at 2.8 percent.
Tony Sycamore, a market analyst at IG, highlighted the Federal Reserve's efforts to temper expectations of aggressive interest rate hikes earlier this year. Despite acknowledging potential bumps along the way, the Fed has consistently emphasized a cautious approach to monetary policy, aiming to balance economic growth with inflationary pressures. As investors await the latest inflation data, the Fed's stance on interest rates remains a key factor influencing market sentiment and currency movements.
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