The US Dollar (USD) is trading broadly flat on Thursday, maintaining its recent gains. Markets have largely priced in a 25 basis point (bps) rate cut by the Federal Reserve (Fed) at the upcoming meeting, and attention is now shifting to the European Central Bank (ECB) and US economic data.
ECB Rate Decision
The ECB is expected to announce a 25-basis-point rate cut on Thursday. However, the message from ECB President Christine Lagarde will be closely watched, especially given the concerning economic headlines from the Eurozone.
US Economic Data
The US will release weekly Jobless Claims and Producer Price Index (PPI) data on Thursday. The PPI data is expected to show a slight increase in monthly core inflation and a deceleration in yearly headline inflation.
Market Outlook
The CME Fedwatch Tool continues to show a high probability of a 25 bps rate cut by the Fed on September 18. US equities are rallying, anticipating the ECB’s rate cut.
US Dollar Technical Analysis
The US Dollar Index (DXY) is trading within a range, with resistance at 101.90. A break above this level could lead to further gains, while a break below 100.62 could signal a potential downtrend.
