© Reuters. FILE PHOTO: U.S. Dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
By Rae Wee
SINGAPORE (Reuters) – firmed on Monday and distanced itself from an eight-month trough ahead of a slew of central bank meetings this week, including the Federal Reserve’s, with traders keenly focused on guidance for the path of interest rate rises.
The , which measures the greenback against a basket of currencies, rose 0.03% to 101.92, edging away from last week’s eight-month low of 101.50.
However, it remained on track for a fourth straight monthly loss of 1.5%, pressured downward by expectations that the Fed was nearing the end of its rate-hike cycle and that interest rates would not have to rise as high as previously feared.
was up 0.01% at $1.24005, while the edged 0.09% higher to $0.6500.
Moves were subdued ahead of policy meetings from the Fed, the European Central Bank (ECB) and the Bank of England (BoE) later this week.
“We will range trade a little bit as the market tries to assess how the central banks behave …. I think, for all three it’s going to be more about what they say than what they do,” said Rodrigo Catril, a currency strategist at National Australia Bank (NAB).
The Fed is widely expected to deliver a 25 basis point rate hike, while the ECB and the BoE are likely to raise rates by 50bp each.
The euro was last 0.03% higher at $1.08705 and was on track for a monthly gain of nearly 1.5%, marking its fourth straight month of increases.
The single currency has got support from continued hawkish rhetoric by ECB policymakers and ebbing fears of a deep recession in the euro zone.
Elsewhere, the rose 0.11% to $0.71175, while the Japanese yen slipped marginally to 129.94 per dollar.
Core consumer prices in Japan’s capital for the month of January marked the fastest annual gain in nearly 42 years, data on Friday showed, keeping the Bank of Japan under pressure to phase out its economic stimulus.
With China returning from its Lunar New Year holiday, focus will be on the upcoming release of its purchasing managers’ index (PMI) data on Tuesday.
“The market will be looking … hopefully not to get disappointed,” said NAB’s Catril.
“So far, the data coming from China, or the vibes coming from China, do play to the view that a good reopening in terms of activity is likely to unfold.”
Lunar New Year holiday trips inside China surged 74% from last year after authorities scrapped COVID-19 travel curbs, state media reported on Saturday.
The was last more than 0.1% higher, at 6.7465 per dollar.
