The cautious mood in the financial markets is boosting the US Dollar as trading remains subdued on Monday, February 20, due to the Presidents' Day holiday. With US markets closed for the long weekend, trading volumes are expected to stay thin, influencing currency pair movements. In this context, Federal Reserve (Fed) Board of Governors member Michelle Bowman has highlighted potential obstacles in the Fed's progress on curbing inflation.
Bowman pointed out that rising asset prices might have impeded the Fed's efforts to manage inflation effectively. Despite these challenges, wage growth continues to exceed the level consistent with the Fed's inflation target. This observation adds a layer of complexity to the current economic landscape, as policymakers navigate through uncertain waters.
In forex markets, the EUR/USD pair is facing modest bearish pressure, trading below 1.0500 as of Monday. Meanwhile, GBP/USD is experiencing stability, fluctuating within a narrow channel near 1.2600 during the latter part of the day. The subdued trading action reflects the absence of US market participants due to the Presidents' Day holiday.
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