Europe Asia News

Positive U.S. inflation data last week strengthened expectations that the Federal Reserve may cut interest rates later this year, putting pressure on the dollar.

The annual inflation rate fell to 2.4% last month from 2.6% in the previous two months, coming in below forecasts of 2.5%. On a monthly basis, inflation declined to 0.2% versus expectations of remaining steady at 0.3%.

Meanwhile, earlier data showed that U.S. employment recorded its strongest increase in more than a year and the unemployment rate unexpectedly declined, signaling stability in the labor market.

Markets are currently pricing in a Fed rate cut in July, with a high probability of a move also in June.

Investors are now looking to the Fed’s latest meeting minutes, fourth-quarter GDP data, and the Fed’s preferred core PCE price index report for further clues on the monetary policy outlook.