© Reuters.
By Peter Nurse
Investing.com – The dollar loses positions at the beginning of the trading day in Europe this Monday, deviating from Friday’s highs pending the release this week of key US inflation data, which could be another test of the Federal Reserve’s ideas on the interest rate hike agenda.
At 8:55 a.m. (CET), the, which follows the evolution of this currency against a basket of six other main currencies, fell 0.1% to 94,252, after reaching the level of 94,645 on Friday, its level highest in more than a year.
In addition, the pair fell to the level of 1.1564, remaining just above the 15-month lows registered on Friday at 1.1513, while the pair points to a rise of 0.1% to 113.56, recovering part of the ground lost last week. The pair fell 0.1% to 1.3487, after hitting a five-week lows at 1.3425 on Friday, following the Bank of England’s decision to keep interest rates unchanged.
The dollar’s downward trend following the Federal Reserve’s insistence that it would be “patient” in deciding when to raise interest rates, even after starting to cut them, was sharply reversed on Friday after the release of the report by job.
The Fed had called for a further recovery in the labor market before considering raising its benchmark interest rates, and that is what it has now. The October non-farm employment report showed an increase of 531,000 jobs, and the September data was revised up to reflect the creation of 312,000 jobs instead of the 194,000 indicated above.
No less than six Fed officials appear on Monday, which may give an idea of the strength of the central bank’s consensus on the future course of interest rates.
This occurs in anticipation of the release on Wednesday of the latest US inflation data that is expected to show increased consumption growth, further testing the resolve of these central bankers.
“Inflation will rise even higher and it seems that the average CPI will reach the highest year-on-year rate in modern times,” Nordea (ST 🙂 analysts say in a note. “We believe that the Fed rate hikes are only seven or eight months away.”
On the other hand, the pair fell to the 6.3976 level after China’s growth slowed in October although it beat forecasts, which has helped cushion weak data that pointed to a general weakening in the currency. domestic demand.
The Communist Party begins a meeting on Monday in which the foundations are expected to be laid for a third term of President Xi Jinping.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.