The US dollar appeared to weaken in last week's closing trade, retreating from the 2-year high reached when it strengthened after the latest FOMC meeting results.
In the New York session last Friday, the PCE price index data, which is one of the inflation components focused on by the central bank, recorded a lower reading than expected, disrupting the momentum of the US dollar's movement.
Recalling the last meeting of 2024, the Federal Reserve (Fed) lowered interest rates by 25 basis points to 4.50% as expected, but has signaled to slow down their policy easing steps.
This follows indications from current economic data from the United States (US) with the focus on a resurgence in inflation figures.
In addition, the market is also assessing developments regarding the risk of a 'government shutdown' following the spending bill supported by President-elect Donald Trump not being approved in the House of Representatives last Thursday.
However, it was reported that the spending bill was approved last Saturday and signed by President Joe Biden at the last minute.
Lawmakers are looking to avoid any problems ahead of the holiday season with a funding package to be distributed to the government through March 14 that also includes $110 billion in disaster relief and financial aid for farmers.
A lack of major economic data this week is likely to slow markets, but price action remains uncertain with the risk of volatility.
US consumer confidence survey data in the New York session tonight will be watched which is seen as driving the US dollar's movement early in the week.
