LONDON/SINGAPORE, Aug 7 (Reuters) – The dollar rose on Monday as markets turned their attention to this week’s inflation data from the world’s two largest economies after mixed U.S. jobs data on Friday. . .
The euro fell as Monday’s data showed German industrial production fell more than expected in June, highlighting the challenges manufacturers face in Europe’s worst economic downturn.
The dollar bounced back from a one-week low on Friday after the U.S. economy posted weaker-than-expected job gains in July, but fell less in a day on solid wage gains and signs of falling unemployment. became limited.
This suggested that the Federal Reserve may need to hold interest rates for an extended period of time.
The US dollar index against a basket of other major currencies rose 0.25% to 102.31 from Friday’s low of 101.73.
U.S. inflation data is due out on Thursday, with core inflation expected to hit 4.7% annualized in July.
“We’re seeing a cooling in the labor market, but it’s not crashing.
“It’s hard to see a big pullback across the dollar pair because basically the U.S. is still the fastest growing country and the central bank is still very data dependent,” Weston said.
“I think there is a risk that the consumer price index will beat expectations this week.”
The euro fell 0.34 percent against the dollar to $1.0975, rising to a one-month low.
“This morning’s weaker-than-expected German industrial production data is a reminder of the headwinds facing the eurozone economy and the possibility that ECB interest rates have already peaked,” said the head of currency strategy. Jane Foley said. Rabobank.
China’s July inflation data are also due out on Wednesday, with traders eyeing signs of further deflation in the world’s second-largest economy.
Analysts at MUFG said in a memo that they expected the country’s headline CPI to record deflation after consumer price growth stalled in June.
“China’s gradual recovery narrative is likely to remain intact in the short term, but continued support from the Chinese government will boost the yuan.”
The Chinese yuan traded near two-week lows, while the offshore yuan fell 0.2 percent to 7.2012 to the dollar.
Chinese officials said on Friday that liquidity in the country’s banking system will remain fairly ample, even as investors seek more liquidity amid slow progress in Beijing’s slow rollout of support to revive the economy. Stated.
The yen fell 0.44% to 142.38 yen to the dollar after reaching a one-week high of 141.52 yen in Asian trade.
The BOJ discussed rising prospects for sustained inflation at its July meeting, and one of its governors said wages and prices could continue to rise at an “unprecedented” pace, according to an opinion summary released on Monday. said there is.
Elsewhere, the pound fell 0.15% to $1.2732, hitting a one-month low on Thursday after the Bank of England raised interest rates by 25 basis points to a 15-year high of 5.25%. moved towards.
It will be the 14th straight rate hike by the central bank, but the pace of monetary tightening has slowed further after raising rates by 50bps at the last meeting.
Reported by Joyce Alves from London and Rae Wee from Singapore.Editing: Jean Harvey, Kirsten Donovan
Our criteria: Thomson Reuters Trust Principles.