After hitting a nearly 20-year high of 105.01 on May 13, the dollar retreated around the 102 level, although Friday’s strong jobs report helped the dollar post its first weekly gain in three.
Ahead of the Federal Reserve policy announcement on June 15, during which the central bank is expected to hike rates by 50 basis points, investors will be eyeing Friday’s market price report. consumption to find out how long the Fed could continue raising rates.
US equities were higher but well off their earlier levels which saw each of the three major Wall Exchange indices post gains of more than 1% as inflation concerns persisted.
“On the one hand, risk appetite is setting the tone for the market ahead of the big events this week, and the big events on the agenda this week will really shape expectations for central bank policy through the end of the year,” said Joe Manimbo, principal market analyst at Western Union Business Solutions Washington.
“The Fed is determined to bring inflation down, and until it sees meaningful progress toward its target, it looks like these aggressive rate hikes remain on the table,” Manimbo added.
The Dollar Index rose 0.333% to 102.430, the Euro fell 0.32% to $1.0685 ahead of a European Central Bank (ECB) policy meeting later this week.
BofA Securities now expects the ECB to raise interest rates by 150 basis points this year, including 50 basis points in July and September, it said in a statement on Monday, alongside a more hawkish of central bank rate hike path by Barclays.
The Japanese yen weakened 0.77% against the greenback at 131.90 per dollar, while the pound last traded at $1.2531, up 0.34% on the day.
The pound gained ground ahead of a confidence vote on Monday after a growing number of lawmakers from Boris Johnson’s Conservative party questioned the British leader’s authority over the partygate scandal.
A majority of the 359 Tory lawmakers – at least 180 – are expected to vote against Johnson to be impeached, a level some Tories have said could be difficult to achieve given the lack of an obvious successor. A Reuters tally showed that at least 169 British lawmakers from Prime Minister Boris Johnson’s Conservative Party had publicly indicated their support for him ahead of the vote.
Bank of Japan Governor Haruhiko Kuroda said on Monday that the central bank’s top priority was to support the economy, underscoring an unwavering commitment to maintain “strong” monetary stimulus.
The Australian dollar was down 0.21% against the greenback at $0.719 ahead of a Reserve Bank of Australia policy meeting on Tuesday.
In cryptocurrencies, bitcoin rose 5.57% to $31,287.90.