Anna 
The recent de-escalation of tensions in the Middle East, coupled with Iran’s indication of reluctance to escalate conflict with Israel following last week’s strike, has spurred a retreat of the safe-haven dollar from its recent highs.
However, Tuesday saw the greenback’s downward trajectory predominantly driven by data revealing a slowdown in U.S. business growth, with activity in April dropping to a four-month low.
Despite this, Federal Reserve officials have maintained a predominantly hawkish stance in recent commentary, suggesting that isolated data points like these are unlikely to prompt an acceleration of rate cuts to the summer.
Analysts at ING remarked, “While activity indicators could prompt some FX moves, the kind of major repricing in Fed expectations that we saw in April can only be triggered by lower inflation, soft employment figures, or Fed communication.
Market attention now turns to the release of first-quarter gross domestic product data on Thursday and the personal consumption expenditures price index, the Fed’s preferred inflation gauge, on Friday, which could potentially induce more significant market movements.
Expectations remain prevalent for the Fed’s first rate cut to occur in September, with November being the second favored month, while June is now viewed as highly improbable.
