Dollar Holds Steady Ahead of Key PCE Inflation Data

The US dollar index stabilized around 104.3 on Friday as investors awaited the latest PCE price index report, the Federal Reserve’s preferred inflation gauge.

The Fed recently raised its inflation forecast amid concerns about the impact of tariffs, clouding the outlook for further interest rate cuts.

On Thursday, the dollar weakened amid growing US economic concerns, as markets braced for a new wave of tariffs from President Donald Trump.

The upcoming reciprocal and auto tariffs, set to take effect next week, have heightened fears of retaliation from key trading partners.

In monetary policy developments, Richmond Fed President Tom Barkin stated that the central bank’s “moderately restrictive” stance remains appropriate, given the high level of economic uncertainty and rapid policy shifts.

The US dollar held steady against most major currencies but gained ground against the Australian and New Zealand dollars.