US Dollar Index fell for the fourth consecutive session on Monday.
The US Dollar Index (DXY) fell to about 104.20 during Asian trading hours on Monday, marking the fourth straight session of decline. However, the better Producer Price Index (PPI) from the United States boosted the US Dollar (USD), but the session ended with losses. The market anticipates little volatility in the greenback following the President’s Day bank holiday.
The greenback fell as former Fed Chairman James Bullard indicated that the Fed cut interest rates in March.
The US dollar faced Downward pressure mounted as US Treasury rates experienced a tumultuous day on Friday, ultimately ending the day under pressure. This movement could be attributable to former Fed member James Bullard’s suggestion that the Fed consider cutting interest rates at its March meeting to avoid stifling economic activity owing to higher rates.
Market opinion suggests that the US Federal Reserve will avoid rate decreases in March and May. The CME FedWatch Tool indicates that there is a 52% chance of a 25 basis point (bps) rate drop in June.
The improved PPI suggests that the Fed may postpone raising interest rates at its upcoming meeting.
The US Producer Price Index (PPI) increased by 0.9% year on year, beating previous expectations of 0.6% and 1.0%. Furthermore, the month-over-month improvement was 0.3%, compared to the preceding fall of 0.1%. . In January, the US Core Producer Price Index (YoY) increased by 2.0%, exceeding the projected 1.6% and the prior 1.7%.
Meanwhile, month-on-month (MoM) data showed a 0.5% increase, compared to the expected 0.1% increase from the previous 0.1% decline. However, the preliminary Michigan Consumer Sentiment Index increased to 79.6 from the prior figure of 79.0, falling short of the projected 80.0 level.
