FOREX-Dollar near 16-month high as clues on Fed policy awaited

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TOKYO, Nov 15 (Businesshala) – The dollar hovered below a nearly 16-month high versus key peers on Monday, as traders await new clues on the US economy after betting on a Federal Reserve interest rate hike last week Was. Red-hot inflation.

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The dollar index, which measures the currency against six peers, was little changed Friday at 95.120, when it posted its biggest weekly gain since mid-August and touched 95.266 for the first time since July 2020.

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The main event on the US economic calendar this week will be Tuesday’s retail sales data, especially after a survey on Friday saw consumer confidence unexpectedly fall to a decade low in early November, as high inflation wreaked havoc on sentiment. Was.

Ray Attrill, head of FX strategy at National Australia Bank in Sydney, considers sentiment readings along with actual spending during the summer, “It will be important to see what the still cash-up US consumers say.” Written in client note.

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The dollar has been volatile since Wednesday, when data last month showed US consumer prices rose at the fastest annual pace since 1990, raising doubts over the Fed’s stance that price pressure would be fleeting.

Money markets were pricing the first rate hike by July and by the end of last week there was a high probability until November of next year.

But gains in the heavily euro-weighted dollar index have also been helped by a fall in the single currency, with the European Central Bank looking unlikely to change its extremely weak policy settings in the near term against the backdrop of a slowing economy.

The euro was little changed at $1.14455, having seen Friday’s 16-month low of $1.1433.

Later on Monday, ECB President Christine Lagarde will speak before the European Parliament’s Committee on Economic and Monetary Affairs.

Since Wednesday, the dollar strengthened around 114 and rose slightly to 113.965 yen.

Sterling rose 0.08% to $1.3421, continuing a recovery from this year’s low of $1.3354 marked on Friday.

The risk-sensitive Australian dollar was steady at $0.7331. It climbed 0.54% on Friday as it reached a one-month low of $0.7277 on the same day.

China releases activity data on Monday, and investors will also be watching any comments emanating from a virtual summit between Chinese leader Xi Jinping and US President Joe Biden.

Reporting by Kevin Buckland; Editing by Ana Nicolasi da Costa


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