The dollar (USD) is trading lower on Monday, in a vital week ahead of key U.S. growth and inflation data and the first meeting of the Federal Reserve (Fed).C

The dollar index, which follows the greenback against a basket of six other benchmark currencies, was down 0.1 percent at 102.984 at midday, falling from one-month highs in recent days.

Dollar slips ahead of key data

The US dollar closed Friday on an uptrend as signs of recovery forced market traders to curb expectations of a possible Federal Reserve (Fed) interest rate cut.

However, today, market traders were able to make positive returns ahead of the release of fourth-quarter growth figures and inflation data in the country.

On Thursday, the US government will release fourth quarter Gross Domestic Product (GDP) data, with the growth rate expected to be 2.0%, following the previous quarter’s rise of 4.9%. December’s personal consumption expenditures data will be released on the same day, just after the consumer price index rose nearly 2.6% in the last year.

European Central Bank meeting is approaching

The EUR/USD was steady ahead of Thursday’s European Central Bank (ECB) meeting.

The market is confident that the ECB will continue to leave interest rates unchanged after halting rate hikes in October last year. However, investors are waiting to see what happens later this week or next week, when the market consequences of the ECB’s decisions will become clear.

Later in the week, the Purchasing Managers’ Index (PMI) benchmark figures will be released, also in the eurozone. The reading is expected to show that business activity remains in contractionary territory.

Europe’s other major market strength, the pound sterling (GBP), traded steady at 1.2700 and held firm regardless of last Friday’s retail sales release.