Dollar hovers near six-week high ahead of consumer spending data, Powell's remarks

Dollar Strengthens Amid Declining Rate Cut Odds

The dollar rose in European trade on Friday against a basket of major rivals, maintaining gains for the fourth straight session near six-week highs as the odds of a June Fed interest rate cut decline.

Now investors await important US personal spending data later today, in addition to Fed Chair Jerome Powell’s speech.

Greenback's Quarterly Profit

The greenback is heading for the biggest quarterly profit since 2022, as pricing for a 0.25% Fed interest rate cut in June drops.

A string of strong US data in recent days in addition to bullish remarks by Fed officials will likely nudge the Fed towards holding interest rates unchanged for an extended duration.

The Index

• The dollar index rose 0.1% to 104.67, with a session-low at 104.51.
• The index rose 0.25% on Thursday, the third profit in a row, scaling a six-week high at 104.73 following US growth data.

Waller's Remarks

Federal Reserve member Christopher Waller said on Wednesday that there’s no rush to cut interest rates, and that he wants to see at least two months of low inflation data before cutting rates.

He added that recent US data could delay the number of expected US interest rate cuts this year.

US Rate Prospects

• Earlier US data showed GDP growth at 3.4% in the fourth quarter of 2023, beating estimates of 3.2%.

Following the excellent data, the odds of a 0.25% Fed interest rate cut fell from 63% to 59%.

Quarterly Trades

The dollar index is up 3.25% so far this quarter on track for the third quarterly profit in the last three quarters.

The gains are underpinned by increasing bullish remarks by Fed officials following upbeat economic data.

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