Forex Signal Bullish

Dollar Muted Ahead of Key Inflation Data

Dollar Muted Ahead of Key Inflation Data

The greenback stayed near 102.1 on Wednesday in quiet trading after slipping a bit on Tuesday, as traders waited for a crucial US inflation report that could sway the Fed’s rate decision in May.

The US Labor Department’s jobs report on Friday showed that the job market was still strong, easing some fears of a potential recession and increasing the likelihood that the central bank could hike rates again in May.

Fed officials gave little guidance on how much more US interest rates would go up, with New York Fed chief John Williams saying that the Fed’s policy course will hinge on incoming data.

Money markets now expect a much higher probability that the Fed will raise rates by another 25 basis points next month.