Dollar Edges Higher as PCE Inflation Data Eyed

The dollar index rose to around 104.4 on Wednesday, inching closer to six-week highs as investors look forward to the latest US PCE price index report due later this week for clues on the path for Federal Reserve monetary policy.

The greenback has also been supported by bets that US interest rates could remain higher for longer even as other major economies start cutting rates, prompting traders to seek carry and haven status from the dollar.

Last week, the SNB unexpectedly slashed its main policy rate, citing the franc’s strength.

The BOE also delivered a dovish pause, as two officials who previously voted for a hike now supported the decision.

Meanwhile, the BOJ pivoted against negative rates and ended yield curve controls, but is expected to remain accommodative for the time being.

Meanwhile, Fed Governor Lisa Cook said on Monday that the central bank needs to proceed carefully as it decides when to begin cutting rates.