The U.S. dollar edged higher in early European trade Monday, but was on track for a second straight monthly loss ahead of the release of more economic data which is likely to shed more light on the future path of interest rates.<\/p>\n
At 02:55 ET (06:55 GMT), the\u00a0Dollar Index<\/a><\/span>, which tracks the greenback against a basket of six other currencies, traded marginally higher at 101.575, but was still on course for a monthly loss of around 1%, having fallen over 2% in March.<\/p>\n Concerns that the U.S. economy is heading for a sharp slowdown have weighed on the dollar index of late, after it hit a 20-year high late last year.<\/p>\n The\u00a0U.S. Federal Reserve<\/a><\/span>\u00a0is widely expected to raise rates by another 25 basis points at next week’s policy-setting meeting as inflation has proved to be stickier than expected, but the focus will be on what happens next amid growing expectations that the central bank will start a loosening cycle this year.<\/p>\n The U.S. data calendar is largely empty Monday, but first-quarter\u00a0GDP<\/a><\/span>\u00a0data will be carefully studied on Thursday. The reading is expected to show that growth slowed from the prior quarter.<\/p>\n The\u00a0PCE price index<\/a><\/span>\u00a0– the Fed\u2019s preferred inflation gauge – is also due later this week, and is expected to show that inflation remained stubborn through March.<\/p>\n EUR\/USD<\/a><\/span>\u00a0dropped 0.1% to 1.0978, ahead of the release of the widely watched German\u00a0Ifo business climate index<\/a><\/span>, which is expected to show corporate confidence improved slightly in April.<\/p>\n PMI<\/a><\/span>\u00a0data released Friday showed that eurozone business activity gathered pace in April, reducing concerns about an impending recession in the region.<\/p>\n The eurozone is due to release advance data on first quarter\u00a0GDP<\/a><\/span>\u00a0on Friday, and is expected to show small growth on the quarter, while April inflation reports from the region\u2019s largest economies\u00a0Germany<\/a><\/span>,\u00a0France<\/a><\/span>\u00a0and\u00a0Spain<\/a><\/span>\u00a0are likely to point to inflationary pressures remaining elevated.<\/p>\n GBP\/USD<\/a><\/span>\u00a0fell 0.1% to 1.2419,\u00a0AUD\/USD<\/a><\/span>\u00a0dropped 0.3% to 0.6671, while\u00a0USD\/JPY<\/a><\/span>\u00a0edged higher to 134.19, ahead of a\u00a0Bank of Japan<\/a><\/span>\u00a0policy meeting on Friday – the first under new Governor Kazuo Ueda.<\/p>\n Ueda is expected to maintain the bank\u2019s ultra-loose policy for now, but could provide cues on an eventual plan to tighten, especially as inflation remains stubborn.<\/p>\n