Lee Hardman, Currency Analyst at MUFG, notes that the US dollar is finishing the week on a softer footing following the release of the weaker than expected services PMI for February which reinforced investor concerns over a sharper US economic slowdown. Key Quotes “The second release today of the US GDP report for Q4 is expected to reveal a modest downward revision to growth reinforcing at the margin the loss of growth momentum evident in the second half of last year. The latest running estimates for GDP growth in Q1 are still pointing towards a rebound in growth to above potential. A solid rebound in personal spending is expected in January following weakness at the end of last year. The larger than expected drop in the Conference Board’s consumer confidence survey is pointing towards more moderate personal consumption growth. We will be watching to see if the drop in consumer confidence is replicated in the University of Michigan survey. The other main release today will be the latest PCE deflator report which is expected to reveal that inflation pressures have firmed. The stronger than expected CPI report for February has signalled some upside to the consensus expectation for the annual rate of core PCE inflation to increase to 1.5%. Evidence of firming inflation pressure should offer support for the US dollar although dampened by continued concerns over slowing economic growth. As a result, the Fed is likely to remain very cautious about resuming rate hikes in the near-term even as actual inflation improves.” For more information, read our latest forex news.