Dollar holds steady after strong U.S. data dents rate-cut hopes
By Harry Robertson and Ankur Banerjee
LONDON/SINGAPORE (Reuters) -The dollar held steady on Monday after ticking higher for a fifth straight week on the back of strong inflation data, while the yen traded near the psychologically important 150 level.
U.S. markets are closed for the Presidents' Day holiday, with trading volumes likely to be low throughout the day.
The dollar index, which tracks the currency against six peers, was last little changed at 104.18, after rising 0.18% the previous week.
It rose to its highest since mid-November last Tuesday at 104.97 after figures showed U.S. inflation came in stronger than expected in January, causing investors to dial down the number of interest rate cuts they expect from the Federal Reserve this year. But it slipped on Thursday after data showed retail sales fell last month.
«In theory last week should have been a good week for the dollar, but the dollar didn’t really hold on to its gains,» said Chris Turner, global head of markets at ING.
«Are we getting near to the point where the pricing in the Fed cycle is about right?»
The euro was very slightly higher at $1.0783, after falling to a three-month low of $1.0695 last week. Sterling was up 0.17% at $1.2621.
Survey-based purchasing managers' index data, released on Thursday, will give a sense of the health of the euro zone and UK economies in February.
The minutes from the Fed's last meeting, due on Wednesday, are likely to be the main release for investors this week.
Investors expect around 90 basis points of Fed rate cuts this year, according to money market pricing, down sharply from around 145 basis points at the start of February.
The dollar slipped 0.19% against the yen on Monday, taking it to 149.94 yen.
It remains
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