The dollar remained broadly stable on Monday as investors waited for new clues to chart the path of U.S. interest rates following cautious comments from Federal Reserve officials, even as inflation shows signs of slowing.
The euro was little changed at $1.0871, not far from the near two-month high of $1.0895 it touched last week. It is up 2% since the start of May, boosted by the fall in the dollar following weakening growth and inflation data in the United States and the recovery of the economy in the euro zone.
Data from last week showed that
Consumer prices in the United States
rose less than expected in April, leading markets to expect the Fed to cut interest rates by 50 basis points this year. However, several Fed officials subsequently expressed concern about the evolution of interest rates.
words of warning
on when rates might fall, prompting markets to move just below the 50 basis point mark.
The dollar index, which tracks the currency’s performance against six major currencies, was up very slightly on Monday, at 104.49. It has fallen about 2% since hitting a more than five-month high in April.
Neil Jones, who works in foreign exchange sales to financial institutions for foreign exchange services firm TJM FX, said a “barrage” of speeches from Fed officials will keep investors on their toes this week.
“If the market moves firmly in one direction or the other (on interest rate cut bets), Fed speakers will tend to act somewhat contradictory in their comments,” he said. he declared.
Four Fed speakers, including Atlanta Fed President Raphael Bostic, are scheduled to speak Monday. Markets will also focus on the minutes of the latest Fed meeting, scheduled for Wednesday. Survey-based economic indicators for the euro zone, Germany, the United Kingdom and the United States are also expected this week, along with other speeches from central banks.
Elsewhere, sterling touched a two-month high of $1.2711, and was last just below that level, ahead of a UK inflation report due on Wednesday.
The Japanese yen held steady at 155.73 per dollar as traders watched for any signs of government intervention. The currency has moved in narrow ranges over the past two trading days after a tumultuous start to May, following rounds of monetary interventions suspected by Tokyo of supporting the yen.
Mr Jones also said he expected rising gold and copper to support the currencies of commodity-exporting countries, such as Australia, in the coming months.
The Australian dollar was steady at $0.669 on Monday, but has risen 3.4% this month, partly because Australian inflation has remained stubbornly high.
Short supply, sustained global demand and big bets by speculators have sent copper prices soaring in recent weeks.
Oil price
increased slightly on Monday after a
helicopter crash
killed Iran’s president, while Saudi Arabia’s king faces health problems, portending greater instability in the Middle East.
