The U.S. dollar edged lower on Monday but remained close to the six-week high recorded by the greenback on Friday. The U.S. Dollar index, which measures the dollar against a basket of major currencies, retreated by 0.14% to 103.83. Despite the drop, the index remains 1.8% up for the month. It hit a six-week high of 104.67 on Friday.
Chris Turner, global head of markets at ING observed the dollar’s recent movements, explaining, “The dollar has had quite a big move this month on the back of rates repricing and the question is how much further that’s going to run.”
As the labor market remains tight and prices continue to rise, the Federal Reserve seems intent on continuing its interest rate hikes in the interest of further suppressing inflation. Both consumer and producer prices are on the rise, with retail sales increasing as well despite the hike.
Following the example of the U.S. Federal Reserve, two European Central Bank (ECB) policymakers indicated that interest rates in the eurozone are also set to continue rising.