The US Dollar corrected higher in overnight trade but selling pressure may return as soft PPI and UofM consumer confidence data cools Fed rate hike speculation.
US Dollar Pullback May Resume on Soft PPI, Consumer Confidence Data
Australian Dollar Underperforms in Asia, Tracking ASX/S&P 200 Decline
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The US Dollar corrected higher in overnight trade, rising as much as 0.2 percent on average against its leading counterparts. The move appears corrective after the greenback produced its largest daily drawdown in a month in the prior session. The Australian Dollar underperformed, sliding as much as 0.4 percent against the majors. The move tracked a drop in Australia’s benchmark S&P/ASX 200 stock index, pointing to risk aversion as the catalyst behind the decline in the sentiment-sensitive currency.
A quiet economic calendar in European trading hours is likely to see traders looking ahead to the US data docket for direction cues. February’s PPI report is expected to put core year-on-year wholesale inflation at 1.6 percent, matching the four-month low recorded in January. Separately, the University of Michigan consumer confidence gauge is expected to edge narrowly higher in March.
Last week’s payrolls data notwithstanding however, US economic news-flow has tended to underperform relative to expectations since late December. This warns that analysts may be overestimating the economy’s vigor and opening the door for a downside surprise. Such an outcome may cool Fed rate hike speculation, weighing on the greenback.
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