US dollar holds firm ahead of CPI release
The US dollar strengthened on Monday, holding on to highs after stronger-than-expected US payrolls data, while sterling continued to struggle for company
At 4:35 AM ET (09:35 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading 0.4% higher at 109.930, having hit its strongest level since October 2022 on Friday.
Dollar strengthens ahead of CPI
The dollar received a boost after Friday’s data showed US job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1%, prompting traders to scale back bets on a Federal Reserve interest rate cut this year.
Markets are now pricing in just 27 basis points of Fed rate cuts this year, down from around 50 bps earlier in the year.
“Friday’s strong US jobs release has given the dollar another boost higher. "It's hard to see the dollar trend changing this week given the prospect of a strong set of U.S. inflation data, which will further raise questions about whether the Fed needs to cut rates this year," analysts at ING said in a note.
Wednesday brings the release of U.S. December CPI inflation data, and any positive surprises could threaten to shut down the door on easing altogether.
Source: Investing.com
