USD at multi week highs ahead of inflation data

The US dollar is wavering near yesterday’s multi-week highs this morning, though it appears largely subdued due to a lack of fresh economic releases.

The greenback may face a volatile afternoon of trading, with key releases on US employment and industrial activity anticipated later today.

Analysts will be closely looking over the releases for any signs of economic softening, which could prompt a shift in Federal Reserve interest rate cut expectations.

While the USD has certainly been strengthened from hawkish Federal Reserve rhetoric earlier in the week, signs of cooling in the economic superpower may dampen the current run of positivity.

Looking towards the remainder of the week, the latest initial jobless claims report is set to be released in the US. Economists expect the number of US citizens claiming unemployment benefits to have fallen slightly for the week ending June 22. The slight dip to 236,000 could lend the greenback modest support, indicating that the US labor market remains relatively steady. This stability could provide the Federal Reserve with more leeway to maintain a cautious stance towards monetary policy.

The latest durable goods orders report is also set for release in the US this afternoon. Markets expect a significant decline in new orders for May, falling to -0.1%, which could dampen USD exchange rates.

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