US recap: EUR/USD slips as market awaits bigger fish to fry
June 25 (Reuters) -The dollar mostly firmed within recent ranges against other majors on Tuesday as the market awaited catalysts to resolve questions over the path of Fed policy and European politics.
Expectations that Friday's PCE price data will show a resumption of U.S. disinflation presents the recently firm dollar with potential downside risks, since such an outcome could soften the market's perception of future Fed policy.
However, uncertainty over the fortunes of the far right and left in France's June 30 and July 7 parliamentary elections remains a supportive safe-haven argument for the dollar due to worries about the implications for fiscal policy in the euro zone's second-largest economy.
The fact that UK voters go to the polls on July 4 adds to the political muddle confronting investors.
Lending rhetorical support to the dollar, Fed Governor Michelle Bowman reiterated her view that holding the policy rate steady "for some time" will probably be enough to bring inflation under control, but also repeated her willingness to raise borrowing costs if needed.
Fed Governor Lisa Cook said the U.S. central bank is on track for a rate cut if the economy’s performance meets her expectations, but she declined to say when the Fed will be able to act.
U.S. Treasury yields were narrowly mixed, sticking to familiar ground.
The S&P 500 firmed 0.34% by New York afternoon trade, while The tech-heavy Nasdaq jumped over 1%, buoyed by strength in Nvidia and other megacaps, while the Dow slipped as investors awaited the PCE release.
WTI slid 0.89%, as weak U.S. consumer confidence data added to concern about the U.S. economic outlook and investors scrutinized summer driving demand.
Conference Board consumer confidence fell this month, though less than expected, while May was revised lower.
Copper fell 1.42%, as the firmer dollar spurred a bout of selling, with stalled demand growth in top consumer China and soaring inventories reinforcing negative sentiment.
Gold weakened 0.59%, also hurt by the firmer U.S. currency.
Heading toward the close: EUR/USD -0.16%, USD/JPY +0.06%, GBP/USD +0.08%, AUD/USD -0.11%.
For more click on FXBUZ
(by Burton Frierson)
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