Dollar index stays flat; Focus shifts to Fed decision

Dollar index stays near the flat line on Thursday, giving back the spike registered in the previous session amid fears that escalating trade tensions could drive US economy into recession. President Donald Trump warned of additional tariffs on EU goods after the EU and Canada retaliated against existing US trade barriers. Meanwhile, US Consumer Price Index (CPI) for February increased 2.8% on year, slightly below the expected 2.9% and down from 3.0% in January, indicating continued moderation in inflation that also weighed down the greenback. Core CPI, which strips out volatile food and energy prices, dipped from 3.3% in January to 3.1%, reinforcing signs of continued disinflation in the U.S. economy. Currently, the US Dollar Index (DXY), which measures the value of the US Dollar (USD) against its six major peers, remains steady after registering gains in the previous session, trading around 103.26. Among basket currencies, EURUSD and GBPUSD are quoting marginally lower at $1.0880 and $1.2953 respectively. Investors are all eyes on the Fed that is set to announce its policy decision next week.

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