The rise of the US dollar came to a full stop on Monday after two weeks of rapid gains. Currency traders are reevaluating the greenbackâs recent gains, which forced the currency to edge lower today after reaching its strongest level since 2003 last week.
Investors turned away from the safety of the Japanese yen to speculate the limit of the US currencyâs gains on the short term. Markets expect that the US Federal Reserve will need to move faster to higher interest rates to adjust its monetary policy for an inflation rate increase that could be resulted from Donald Trumpâs aim to widen fiscal spending.
However, Mondayâs corrective move came after the US dollar rose for 10 days in a row against other major peers. A stream of comments and statements from officials of the Federal Reserve, including Fed Chair Janet Yellen and Fed New York President William Dudley, increased investorâ speculations that an interest rate hike will be decided next month.
Futures prices show a 95.4% probability that the Federal Open Market Committee will move its benchmark rates higher in its upcoming meeting on December 14, which supported the dollarâs gains.
EUR/USD traded at 1.0627 as of 14:44 GMT as the pair climbed from 1.0592, its trading level at the beginning of the day. USD/JPY remained little changed at 110.90 after starting trading on Monday at 110.97.
The Dollar Index, which measures the strength of the US currency against its major peers, was at 100.90 as of 14:34 GMT, after closing at 101.21 on Friday.
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