The US dollar fell in European trade on Monday against a basket of major rivals, extending losses for the second straight session and about to hit five-month lows following weak US data.
It comes ahead of the Federal Reserve’s policy meeting this week to discuss monetary policy developments and provide clues on the path ahead for interest rates.
The Index
The dollar index fell 0.3% today to 103.46, with a session-high at 103.80.
On Friday, the index lost 0.1%, resuming losses and rebounding from a five-month low at 103.2.
The index lost 0.2% last week, the second weekly loss in a row on concerns about a potential US recession this year.
Weak Data
Recent US data showed consumer confidence hit 2-⅕ year lows in March in a sign of increasing concerns about recession.
US retail sales rose by less than expected in February, in another sign of slowing growth this quarter.
Fed’s Meeting
The Federal Reserve is convening tomorrow and Wednesday to discuss policies, widely expected to maintain interest rates unchanged while providing clues on the path ahead for monetary policies.
Data released last week showed US consumer prices slowed down more than expected in February, bolstering the case for a Fed rate cut in the first half of the year.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in March stood at just 1%, while the odds of a May rate cut stood at 30%.
The odds of a Fed June 0.25% interest rate cut stood at 75%.
