Ella 
In early Asian trading on Friday, the U.S. dollar index (DXY) returned to above the 104.00 mark. The dollar index was boosted by the prospect that the Federal Reserve (Fed) might delay cutting interest rates amid high U.S. inflation. The U.S. dollar index was at 104.13, up 0.01% on the day.
The U.S. PCE price index slowed to 2.4% in January from 2.6% in December. Meanwhile, the core PCE price index increased at an annual rate of 2.8%, compared with 2.9% in December. Data from the U.S. Bureau of Economic Analysis showed that both data were in line with market expectations.
Investors expect the Federal Reserve to begin cutting interest rates in the summer. However, the timing and details of the Fed’s easing policy are uncertain, as inflation may be more stubborn than previously expected, fueling speculation that the Fed will keep interest rates at high levels for longer.
Several Fed officials stressed that policymakers will wait for more evidence from inflation data before considering a rate cut. Atlanta Fed President Raphael Bostic said recent inflation data suggested the road to the central bank’s 2% inflation target would be “bumpy.” Chicago Fed President Austan Goolsbee said he expects to cut interest rates for the first time later this year, but he could not announce a specific timing.
Investors will get more clues from Friday’s U.S. ISM Manufacturing PMI, Michigan Consumer Sentiment Index and S&P Global Manufacturing PMI. Fed officials Williams, Logan, Waller, Bostic, Daly and Krueger will speak later in the day. These events could provide a clear direction for the U.S. Dollar Index.
