Dollar holds steady after strong U.S. data dents rate-cut hopes By Reuters

© Reuters. FILE PHOTO: U.S. greenback banknotes are seen on this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration

By Harry Robertson and Ankur Banerjee

LONDON/SINGAPORE (Reuters) -The greenback held regular on Monday after ticking larger for a fifth straight week on the again of robust inflation information, whereas the yen traded close to the psychologically vital 150 degree.

U.S. markets are closed for the Presidents’ Day vacation, with buying and selling volumes prone to be low all through the day.

The , which tracks the foreign money towards six friends, was final little modified at 104.23, after rising 0.18% the earlier week.

It rose to its highest since mid-November final Tuesday to 104.97 after figures confirmed U.S. inflation got here in stronger than anticipated in January, inflicting buyers to dial down the variety of rate of interest cuts they anticipate from the Federal Reserve this 12 months. However it slipped on Thursday after information confirmed retail gross sales fell final month.

“In principle final week ought to have been a very good week for the greenback, however the greenback didn’t actually maintain on to its beneficial properties,” Chris Turner, international head of markets at ING, stated.

“Are we getting close to to the purpose the place the pricing within the Fed cycle is about proper?”

The euro was unchanged at $1.0777, after falling to a three-month low of $1.0695 final week. Sterling was up 0.1% at $1.2612.

Survey-based buying managers’ index information, launched on Thursday, will give a way of the well being of the euro zone and UK economies in February.

The minutes from the Fed’s final assembly, due on Wednesday, are prone to be the primary launch for buyers this week.

Buyers anticipate round 90 foundation factors of Fed charge cuts this 12 months, in response to cash market pricing, down sharply from round 145 foundation factors in the beginning of February.

The greenback slipped 0.16% towards the yen on Monday, taking it to 149.97 yen.

It stays round 6% larger towards the yen this 12 months as Japan has stored its ultra-loose financial coverage in place. That has created a large hole between the 2 nations’ bond yields which has boosted the attractiveness of the greenback.

The rally has prompted hypothesis amongst buyers that the Japanese authorities may intervene to spice up their foreign money.

Finance Minister Shunichi Suzuki final week warned that “fast strikes are undesirable for the economic system”.

Weekly information from the U.S. markets regulator confirmed speculators once more elevated their web quick place towards the yen, taking it to a greater than two-month excessive value $9.2 billion.

China’s barely budged as buyers returned from the week-long Lunar New 12 months break, regardless of tourism revenues surging through the vacation. It final modified fingers for round 7.1983 per greenback.