US Dollar stuck in a range

USD is expected to trade sideways with a weakening bias in the short term, as the Fed seems to remain very dovish and inflation is still not showing any sign of picking up, according to last week's release. 

With only tier 2 data in the US next week, any major moves are not expected in the dollar and look for further positioning reductions. On the data front, on Tuesday, we get durable goods orders for May; a monthly drop is expected in the headline figure of 2.5% (consensus: -0.5%) and an increase of 0.7% in the core, compared with the 0.6% consensus (ex-transport). 

Later in the week is the final reading of Q1 GDP, which is expected to be revised up from -0.7% to -0.2%. Finally, on Thursday, the PCE index is scheduled to be published, along with personal income and spending data. 

"Regarding the PCE, we are slightly below consensus, expecting a 0.3% increase m/m (consensus: 0.4%), while for the core series, we and the consensus expect +0.1%. For spending and income data, we forecast +0.8% and 0.4% respectively",says Barclays.