During European trading on Thursday, the EUR/USD pair climbed to about 1.1800. Despite the rise in major currency pairs, the US dollar (USD) retained its values from Wednesday, buoyed by the balanced minutes from the Federal Open Market Committee (FOMC) meeting held in January.
The US Dollar Index (DXY), which reflects the dollar’s strength against a basket of six key currencies, remained high around the weekly peak of 97.70 reached on Wednesday.
The minutes from the recent Federal Reserve meeting indicated that members were not in a rush to lower interest rates, especially since inflation in the U.S. has been above the central bank’s 2% target for a considerable time. The minutes noted, “Several policymakers reportedly said that if inflation declines as expected, further interest rate cuts would likely be appropriate.”
Looking ahead, the key factor for the US dollar will be the preliminary GDP figures for the fourth quarter, set to be released on Friday. Expectations are pointing to a 3% year-on-year growth, which is a drop from the earlier projection of 4.4%.
On the same day, investors will also pay attention to the preliminary private Purchasing Managers’ Index (PMI) figures from both the Eurozone and the US for February. The PMI report is anticipated to show faster growth in overall business activity in both regions.
