The Dollar Remains Stable

Following last week’s bruising drop, the US dollar held firm as Fed Governor stated that the central bank’s fight against inflation would not be softened.

After Thursday’s slightly lower-than-expected inflation data, the dollar index (DXY)  fell 3.6124% in two sessions last week, its biggest two-day drop since 2009.

Moreover, global equities rose as investors turned to riskier assets in hopes that rising inflation would ease Fed rate hikes.

However, Waller of the Fed said on Sunday that the inflation print last week was “just one data point” that would need other similar readings to show that inflation is slowing convincingly.

Currencies

According to Kong, US inflation will likely remain high, keeping the Fed on its monetary tightening path.

In November, consumer confidence fell, weighed down by ongoing concerns about inflation. The two-year yield in the United States increased to 4.41% after falling as low as 4.29% on Friday.

The Japanese yen fell 0.24% against the dollar to 139.12 per dollar after rising 5.4% against the greenback last week. The euro was last trading at $1.0331, down 0.2%. Sterling was last trading at $1.17918, down 0.31223% on the day, ahead of British Chancellor George Osborne’s Autumn Statement on Thursday, in which he should announce tax increases and spending cuts.

The DXY fell 0.094% to 106.610, not far from its low of 106.27 on Friday.

Bitcoin dropped about 1% to $16,170.

The Chinese yuan experienced a 0.23% fall against the US dollar on the day, closing at $7.0723 per dollar. The yuan rose on Friday after Chinese health authorities relaxed some of the country’s strict Covid-19 restrictions. Gold prices fell slightly on Monday, as the dollar and US bond yields rose following a warning from a top US central banker that the Fed is not “softening” its stance on inflation.