The dollar is at a 16-month high as Reuters turns its attention to retail sales data

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By John McCrank
NEW YORK (Reuters) – The safe haven dollar hit a 16-month high on Monday against its major counterparts, fueled by concerns about global growth and inflation, as well as monetary policy expectations as investors waited for data on U.S. strengths this week. consumers.
The dollar rose on Wednesday as US consumer prices rose at the fastest pace in the year since 1990, questioning the Federal Reserve’s view that price pressures will be temporary and that interest rates will rise sooner than expected.
“I feel like I was trading in the 90s, everyone was paying more attention to what the Fed was going to do,” Joseph Trevisani, a senior analyst at FXStreet.com, said.
“It’s been a while since we’ve seen any real change in comparative sovereign rates and it looks like we’re going to do that.”
The currency, which measures up against six peers, rose to 95,462 on Monday, the highest since July 2020, and rose to 0.274% for the last time from 95,394.
Demand for the greenback softened on Friday when a report showed consumer sentiment fell to a one-decade low, partly due to rising inflation. But it strengthened again on Monday after political leaders in Europe and the UK expressed concerns about growth and prices.
Investors will look at U.S. retail sales data on Tuesday to see where the dollar can go. The data is expected to see a 1.1% rise in retail sales over the past month, according to a Reuters poll.
“Following the data on consumer sentiment, there will be a firm focus on U.S. retail sales tomorrow to see if the decline in consumer morale is reflected in retail sales,” said Fiona Cincotta, senior analyst at City Index financial markets.
The gains in the euro-weighted dollar index have also contributed to the fall in the single currency, and European Central Bank President Christine Lagarde has continued to push back market bets on tighter policies.
Bottles in the supply chain and rising energy costs are slowing eurozone growth and will keep inflation rising for longer than expected, Lagard said.
Jane Foley Rabobank, head of London’s FX Strategy, said Lagard had kept the euro in check by “repeating the right approach of policy makers”.
The euro was down 16 months against the greenback and fell 0.49% to $ 1.13865.
Compared to the Swiss franc, the euro was weakest in 18 months and fell 0.17% in the last 1.0524.
Interest in the Euro / Swiss franc has risen sharply, said Simon Harvey, senior analyst at the Monex European FX market, “because the Swiss franc is a natural hedge against inflation.”
Ms. Maechler, a member of the governing board of the Swiss National Bank, said that low inflation in Switzerland, at a rate of about 1.2% a year, was limiting the rise in the franc. But he reiterated the SNB’s commitment, if necessary, to interventions in the currency market designed to limit the impact of the strength of the Swiss franc on the Swiss export-oriented economy.
In the UK, the pound rose 0.16% to $ 1.3429, the start of a busy week with numbers of jobs, inflation and retail sales to see if the Bank of England will raise rates in December, as markets expect. On Friday, the pound touched the lowest level this year against the dollar.
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