The dollar has experienced quiet trading since the beginning of this week, as traders await the release of the latest U.S. inflation data. The Producer Price Index for April is scheduled to be released later on Tuesday, ahead of the crucial Consumer Price Index report on Wednesday, which is expected to show a 0.3% monthly increase in core consumer prices in April, down from a 0.4% increase in the previous month.
The Federal Reserve has indicated that any potential rate cuts are data-dependent, and a hotter-than-expected inflation reading is likely to reduce the chances of rate cuts for the rest of the year.
In Europe, the British pound fell against the dollar following the release of the latest UK jobs data, which showed that the country’s unemployment rate rose to its highest level in nearly a year. The unemployment rate in the UK rose to 4.3% in the three months to March, the highest level since May to July of last year, up from 4.2% in the previous three months.
This is likely to strengthen the case for a rate cut in the near future. The average wage growth, excluding bonuses, remained at 6%, continuing to outpace inflation. It was expected to slow to 5.9% between January and March.
