HONG KONG- The euro was near Friday’s three-week high on Monday morning, after the European Central Bank’s hawkish turn last week, but analysts said further short-term gains looked less likely with looming Fed tightening supporting the dollar.
Meanwhile, in cryptocurrency markets, Bitcoin held around a two week high.
Investors this week will be watching for US inflation data due Thursday, with a strong reading cementing expectations that the Fed will raise rates at its March meeting and hint at the possibility of a large 50 basis point rise.
The euro was last at $1.1451, not far from Friday’s high of $1.4183, equalling mid-January’s top.
The yen was at 115.16 per dollar, and sterling was at $1.35310, both in the middle of their recent ranges.
This left the dollar index at 95.461, having been given a late boost by strong US jobs data Friday at the end of a bruising week for the greenback.
It also could gain further in the short term.
“We see the risk of more USD upside in the near-term if interest rate markets price a greater chance of a 50bp hike in March. But last week’s hawkish turn by ECB President Christine Lagarde suggests any upside in the USD will be capped,” said Joe Capurso, head of international economics at Commonwealth Bank of Australia, in a morning note.
