The U.S. dollar remains under pressure against major peers as investors await the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, due later this week. The U.S. Dollar Index (DXY), which measures the greenback against six major currencies, is near recent lows and has fallen below its 50-day moving average, a technical signal often viewed as bearish. The dollar is near a two-month low against the euro, while the Japanese yen is at its strongest level in several weeks. The Australian and Canadian dollars have also advanced, supported by firmer commodity prices and improved risk sentiment. Core PCE, which excludes volatile food and energy prices, is expected to rise 0.3% month over month in January and remain at 2.8% annually, above the Federal Reserve’s 2% target but consistent with gradual disinflation. The CME FedWatch tool implies roughly a 60% probability of a rate cut by June, while a growing minority expects a move as early as May. A hotter reading could support the dollar by reinforcing expectations for higher interest rates for longer, while a cooler result could extend its decline. Traders will also watch revisions to previous months because they can alter the underlying inflation trend. Jane Doe, senior currency strategist at a major financial firm, said a weaker-than-expected PCE reading could push the DXY below the 103 support level, while an upside surprise could trigger a sharp short-covering rally. Broader factors, including global growth, geopolitical events and other central-bank policies, also matter; the European Central Bank has resisted market expectations for rapid rate cuts, supporting the euro. The report is expected to influence currency markets, global trade, emerging markets and corporate earnings in the coming weeks, with volatility likely to rise if the data differs from consensus.