The US Dollar is trading modestly higher against most major currencies, with investors largely cautious ahead of key economic data due later in the day.
Trump Targets Powell Again as US Dollar Holds Steady
The US Dollar Index (DXY), which measures the strength of the US Dollar against a basket of six major currencies, is slightly up, trading at 99.40 as of Wednesday morning. The index remains capped below the psychological 100.00 level, with traders awaiting critical US data releases including GDP and PCE figures.
Current President of the United States, Donald Trump, made headlines again during a rally in Detroit, where he signed an executive order aimed at easing the tariff burden on car parts. He also reignited his long-standing criticism of Federal Reserve Chairman Jerome Powell, declaring once more that he “knows more about interest rates” than Powell.
Key Economic Data to Set the Tone
Today serves as a warm-up for Friday’s closely watched Nonfarm Payrolls report. The preliminary reading of Q1 Gross Domestic Product (GDP), due at 12:30 GMT, will offer the first clear look at how Trump’s tariff measures may have impacted economic growth. A weak print could raise recession concerns, while a stronger-than-expected figure may fuel optimism in equity markets.
At the same time, March’s Personal Consumption Expenditures (PCE) data will be released. Economists are expecting the Core PCE to dip to 0.1% from 0.4%, and the headline PCE to fall to 0% from 0.3%, reflecting slowing inflation pressures.
Later, at 13:35 GMT, the Chicago PMI for April is scheduled, with expectations for a decline to 45.5 from the previous 47.6, indicating contraction.
Market Mood: Cautious Trading Ahead of Earnings and Fed Expectations
Equity markets are trading mixed, with US futures pointing to a lower open. Market sentiment remains cautious, especially with Microsoft (MSFT) and Alphabet (GOOG) set to report earnings after the closing bell.
According to the CME FedWatch Tool, there’s a 7.6% chance the Federal Reserve will cut rates in May, while the odds for a rate cut at the June meeting stand at 65.1%.
Meanwhile, the US 10-year Treasury yield is down for a second consecutive day, now hovering around 4.15%, as investors slowly rotate back into bonds amid growing rate cut expectations.
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