US dollar index holds at weekly lows ahead of health bill vote

The US dollar index is about to end the week hovering in a range between 99.30 and 99.80, the same range of the last four days. The vote regarding the repeal of Obamacare was expected and it was not clear it there were enough votes to pass it. 

During the American session volatility across financial marketers trended lower with economic data having no impact. Negotiations between Republicans continue, in order to increase the support for the health care bill. 

The DXY is about to post the third weekly decline in a row and the lowest close since the US elections. The greenback has been unable to recover the strength it had before the FOMC statement and continues to be under pressure as US bond yields drop further. The US 10-year yield dropped to 2.40%.  

Next week data 

During the weekend and over the next week, the outcome of the repeal of Obamacare will continue to be an important theme for politics and markets. 

Regarding data for the US, next week, among the most important releases is the PCE core inflation for February on Friday. “While headline inflation has been increasing rapidly and is almost at the Fed’s 2% target, PCE core inflation has remained stuck around 1.7%. We expect the development of PCE core inflation to attract special interest in coming months given the comments at the last FOMC meeting that the Fed has a ‘symmetric inflation target’, which could be interpreted as the Fed will be willing to let inflation slightly overshoot the 2% target”, said analyst from Danske Bank. 

Other reports include Conference Board Consumer Confidence for March (Tuesday), pending home sales (Wednesday), personal income and spending, Michigan Consumer Sentiment and Chicago PMI (Friday).