© Reuters.
By Peter Nurse
Investing.com – The U.S. dollar edged lower in early European trade Monday, but remained elevated after a strong run of U.S. economic data and ahead of the release of the minutes from the Federal Reserve’s latest meeting.
At 03:05 ET (08:05 GMT), the , which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 103.715, but is still up nearly 2% for the month so far, keeping it on track for its first monthly gain since last September.
Trading activity is likely to be limited Monday with the U.S. on holiday to celebrate Presidents’ Day, but the dollar has benefited of late from data showing the world’s largest economy remained resilient despite the higher interest rates.
were robust, unexpectedly fell last week, and has proved sticky, resulting in expectations climbing that the will have to take interest rates higher than previously thought.
Additionally, a number of Fed speakers have expressed hawkish views over interest rates, underpinning the dollar.
Attention this week will turn to Wednesday’s release of the of the U.S. central bank’s January meeting, when it scaled back the pace of interest rate hikes to 25 basis points after a year of larger increases.
Also providing the safe haven dollar with a degree of support has been the rise in geopolitical tensions, with Beijing and Washington at odds over issues surrounding the alleged Chinese spy balloon and potential aid to Russia, while North Korea has reportedly fired three ballistic missiles off its east coast on Monday.
Elsewhere, rose 0.1% to 1.0702, struggling to benefit from European Central Bank policymakers, including President Christine Lagarde, emphasizing their fears about stubborn underlying inflation, given the dollar’s strength.
Eurozone data for February are due later in the session, but most eyes will be on Tuesday’s flash data for February, and then the region’s final figures for January on Thursday, which will be in focus after delayed German data was omitted from the first estimate.
rose 0.1% to 1.2052, fell 0.1% to 134.04, with Kazuo Ueda, the government’s nominee for BOJ governor, set to deliver a testimony on Friday, which will shed more light on the fate of the Japanese central bank’s dovish yield curve control policy.
rose 0.4% to 0.6909, edged higher to 0.6246, while fell 0.1% to 6.8590 after the held its benchmark lending rates unchanged for a sixth consecutive month.
