NEW YORK/LONDON: The US dollar rose against the euro and yen on Monday, as investors kept their focus on the Federal Reserve’s interest rate hiking path after a policymaker said too much was being made of last week’s cooler US inflation data.
The dollar index fell 4% last week, marking its bigg-est weekly drop since March 2020, after data showing US consumer prices rose less than expected in October prompted bets the Fed would scale back its hefty interest rate hikes.
But Governor Christopher Waller flagged on Sunday that the inflation print was “just one data point” and that other similar readings would be needed to show convincingly that inflation was slowing. Waller did say that the Fed could now start thinking about hiking at a slower pace.
The comments, however, poured cold water on investor hopes for a “rapid Fed recalibration,” said Adam Button, chief currency analyst at ForexLive in Toronto.