Sharjah24 - Reuters: As a flood of positive U.S. economic data reinforced the idea that the Federal Reserve will need to hike interest rates higher and for a longer period of time, the dollar stayed steady Monday, close to a seven-week high.
Data on Friday showed U.S. consumer spending rebounded sharply in January, while inflation accelerated. The personal consumption expenditures price index, the Fed's preferred gauge of inflation, shot up 0.6% last month after gaining 0.2% in December.
The dollar index, which measures the U.S. currency against six major peers, was up 0.038% at 105.21, just shy of the seven week high of 105.32 it touched on Friday after the hotter-than-expected data was released.
The index is up 3% for February and set to snap a four-month losing streak as investors adjust their expectations of U.S. interest rates remaining higher for longer.
The market is now pricing rates to peak at 5.4% in July and remain above 5% through the end of the year.
"We're in a bit of a nervous environment," said Moh Siong Sim, currency strategist at Bank of Singapore, adding that the market is uncertain about the future pace of Fed interest rate hikes.
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