The U.S. dollar was on track for a second straight monthly loss on Friday on mounting expectations the Fed could soon end its aggressive rate-hike cycle.
more than expected in the first quarter, consumer spending, which was accompanied by a rise in inflation, accelerated.
A measure of inflation in the economy, the price index for gross domestic purchases, rose at a 3.8% pace after increasing at a 3.6% rate in the fourth quarter, while the core PCE price index jumped at a 4.9% rate after advancing at a 4.4% pace in the prior quarter. "The Fed is widely expected to hike again next week but with inflation remaining sticky, we expect the Fed to stay on hold for the remainder of the year, dashing hopes of a policy pivot in ," said analysts at Societe Generale.held near a recent one-year high and last bought $1.1033. It was eyeing a monthly gain of close to 2%.
The common currency has been buoyed by expectations the European Central Bank still has more to go in raising interest rates, in contrast with a dovish repricing of its U.S. counterpart. "Investors favor currencies that can offer both an ongoing domestic tightening cycle and still some room for a hawkish surprise at the coming meetings," said ING analysts. "In that sense, the euro is one of the very few currencies that can offer this combination at the moment."
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