On Monday, the dollar almost touched near 16-month-high against major peers. Also, traders are awaiting clues regarding the US economy bets last week. They want to know about the Federal Reserve’s interest rate rise on the back of inflation.
The dollar index eased to 95.012, dropping by 0.13 per cent since Friday, the time it made the biggest weekly gain. It was after mid-August it faired so well and reached 95.255, the first time since 2020 July.
The primary event on the economic calendar of the US will be related retail sales data this week on Tuesday. Moreover, the survey on Friday exhibited consumer confidence plunged unexpectedly to the decade low in the early days of November following the inflation hit sentiment.
Since Wednesday, the dollar had been performing erratically, when a broad-based hike in US consumers prices the previous month at the swift annual pace since 1990. It cast some doubts on the stance of the Fed, addressing price pressure as transitory.
By July, money markets were pricing it at a first-rate hike. Moreover, a high likelihood was also anticipated by November next year.
The heavy gains in the euro-weighted dollar index and a drop in the single currency has made changes. Moreover, the Central of Europe won’t be changing its dovish policy settings. It is all happening in the backdrop of a deteriorating economy.
The euro gained 0.13 per cent to USD 1.1457. However, it remained within the sights of Friday’s low of USD 11.1433.
Meanwhile, Christine Lagarde, ECB president, will be addressing the committee on monetary and economic affairs. It will happen in the European Parliament.
The dollar plunged to 113.825 yen by 0.07 per cent. It consolidated around 114 for a while.