Dollar plumbs week lows ahead of US growth data

Dollar fell in European trade against a basket of major rivals with markets considering whether the Federal Reserve will maintain interest rates unchanged at the May meeting. 

Investors now await crucial US data on GDP growth and unemployment claims to gauge the proper pricing for the next policy decision by the Fed. 

The Index

The dollar index fell 0.3% to 102.33, a one-week low, with a session-high at 102.78, after rising 0.2% yesterday, the first profit in three days. 

The Fed

Some analysts expect the Fed to back off its battle with inflation and pause interest rate hikes following the crisis in the banking system.

Currently, markets are pricing in a 57% chance of no change in policies at the May meeting, while pricing for a 0.25% rate hike stands at 43%. 

Growth Data

Later today, US GDP growth is estimated at 2.7% in the fourth quarter, slowing down from 3.2%. 

Unemployment claims are expected up to 196 thousand in the week ending March 25 from 191 thousand in the previous reading.