The dollar decline will stop and markets will turn their attention to April’s core PCE data

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The recent downward trend of the US dollar has stopped, which is consistent with the forecasts of the financial institution ING. Analysts have observed that U.S. economic data has not provided enough momentum at this time to cause the dollar to weaken much more.

This comes after jobless claims fell to 222,000 from a previous week’s augment of 232,000. The labor market showed similar trends in January, when claims peaked at 225,000 before falling to a range of 200,000 to 210 000.

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ING anticipates potential stabilization in USD currency pairs ahead of the release of the April Core Price Index for Personal Consumption Expenditures (PCE), scheduled for May 31. The firm suggests that inter-asset volatility may remain subdued in the coming weeks, which could augment carry trade searches.

Therefore, they express a lack of optimism about the recovery of the Japanese yen, currently considered the most attractive financing currency.

On a related development, the latest economic data from China had an impact on market sentiment. The country recorded a 6.7% year-on-year augment in April industrial production, exceeding the expected 5.5%.

However, retail sales fared worse, recording an augment of 2.3% compared to the forecast 3.7%. According to an ING economist, the data reflects continued caution among households and the private sector in China.

Today’s U.S. economic calendar includes a leading index that is expected to remain at -0.3% in April. Additionally, appearances by Federal Reserve officials Chris Waller, Neel Kashkari and Mary Daly are scheduled. ING forecasts that in the near future the (DXY) rate will remain in the range of 104-105.

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