The dollar slipped from a seven-week high on Monday, as investors took stock of last week’s strong U.S. economic data and the outlook for global interest rates.
Data on Friday showed U.S. consumer spending rebounded sharply in January, while inflation accelerated.
Traders now expect the Fed to raise interest rates to around 5.4% by the summer, according to pricing in futures markers . At the beginning of February, they envisaged rates rising to a peak of just 4.9%.
The U.S. dollar index , which measures the greenback against six major peers, has risen almost 3% in February and is on track to snap a four-month losing streak.
The euro fell to its lowest against the dollar since Jan. 6 on Monday as the U.S. currency gained, slipping to $1.053.
It then rebounded somewhat, however, and was last up 0.16% to $1.056.
The dollar index was last down 0.1% at 105.05, after earlier climbing to a seven-week high of 105.36.
Simon Harvey, head of FX strategy at Monex Europe, said a slight improvement in investor sentiment on Monday, with global stocks rising, may be weighing on the dollar.
“There may also be a factor of month-end flows out of the dollar after a strong February for the greenback,” he said, although he highlighted that the moves were limited.
The dollar was last down 0.22% against the Japanese yen at 136.21 yen, reversing some of its gains after rising to a more than two-month high of 136.58 earlier in the session.
