© Reuters.
Investing.com – The US dollar traded largely unchanged on Monday at the start of the European session, near multi-week lows as traders appeared reluctant to take news positions at the start of a week that includes a policy-setting meeting by the Federal Reserve.
At 02:55 ET (06:55 GMT), the US dollar, which measures the greenback against a basket of six other currencies, was trading flat at 103.153, after falling nearly 0.5% last week, the worst weekly drop. him since mid-April.
Traders are watching the economic data
The dollar fell last week after data showed that the number of Americans filing for unemployment benefits rose to the highest level in more than a year and a half last week, signaling a halt to the year-long cycle of rate hikes when officials concluded Wednesday’s meeting.
However, traders seem reluctant to push the dollar further into the new week, as Tuesday’s US sentiment may change if inflation continues to pick up.
“A jump in US jobless claims sent the dollar lower across the board…underscoring how the FX markets are extremely sensitive to data at this moment,” ING analysts said in a note.
The ECB is rising again, for now…
It rose to 1.0753, as the European Central Bank is expected to raise interest rates by 25 basis points again when officials meet on Thursday.
However, doubts remain about how far the rally will go with increases, given the eurozone fell faster than expected in May and data last week showed that the bloc’s economy fell in the first three months of the year.
A 25 basis point rate hike appears to be a done deal at next week’s ECB meeting. However, with growth disappointing, the economic outlook growing bleak and inflation subsiding, the arguments for further rate hikes are becoming weaker.”
Bank of Japan to maintain a loose policy
It rose 0.1% to 139.49, with its ultra-loose monetary policy expected to be maintained this week, with a moderate economic recovery expected.
A dovish view of the Bank of Japan is expected to keep the yen under pressure in the coming months, as the gap between domestic and external rates widens.
Elsewhere, it rose 0.1% to 1.2575, it rose 0.2% to 0.6752, and it rose 0.2% to 7.1408, with the Chinese yuan falling to a six-month low of 7.1451 against the dollar, as more Chinese state-owned banks began cutting interest rates on yuan deposits.
The move heralds a broader cut in the central bank later this month, as it struggles to support economic growth.
