Dollar Muted Ahead of GDP Data

The dollar index was subdued around 105.8 on Thursday as investors avoided making big bets ahead of US GDP data for the first quarter that could influence the outlook for Federal Reserve monetary policy.

Markets also look forward to the PCE price index report on Friday, the Fed’s preferred inflation gauge, to gain more insights on price trends.

Recent data showed that US durable goods orders exceeded expectations in March, while S&P data indicated that US private sector growth is beginning to slow down last month.

Traders have now scaled back bets on Fed rate cuts this year, but still see September as the potential start of the easing cycle.

The dollar held recent declines against most major currencies.

Meanwhile, it scaled new 34-year highs versus the Japanese yen as investors await policy signals from the Bank of Japan.