Last week’s US inflation data is fueling investor bets that the Fed is nearing the end of its interest rate hike cycle.
He dollar fell this Monday against a basket of six major currencies, after suffering its biggest weekly drop of the yearas traders waited for new economic data and policy decisions before continuing to sell lower.
He euro It extended its advance 0.1% to $1.1234 after hitting a fresh 16-month high earlier in the session. Against its Japanese peer, the greenback was down 0.28% at 138.36 yen, after trading at a two-month low on Friday.
“The impact of US disinflation last week has shaken up the currency outlook, but a few days without key data releases will tell us if that momentum can keep the dollar in check as FOMC (Federal Reserve Federal Open Market Committee) event risk approaches ),” said Francesco Pesole, currency strategist at ING. “The euro/dollar looks a bit overvalued in the near term and could face a correction this week.”
The data from US inflation last week are fueling investor bets that the fed is nearing the end of its interest rate hike cycle, and the dollar index posted its biggest weekly drop since November 2022, down 2.25%.
Both the Fed and the European Central Bank raise rates next week. However, experts see it as likely that the first bank will stop there and start cutting next year, while the second bank could continue raising rates. The dollar index subtracted 0.07%, at 99.891 units.
The pound sterling it was trading at $1.3083, just below the 15-month high hit last week.
Source: Ambito
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