The major currency pairs were slightly changing during the trades on Monday.
The data published in the U.S. on Friday showed that inflation in the country remains high. This may prompt the Federal Reserve to raise interest rates to a higher level and not to lower them for a longer period of time.
Federal Reserve Bank of Cleveland President Loretta Mester said Friday that higher inflation points to the need to raise interest rates further. However, she refrained from speculating whether rates should be raised immediately by 50 basis points at the March meeting.
“The inflation numbers are still not where we need them to be,” she said in an interview with Bloomberg. The report is “consistent with the Fed needing to do a little more on the rate to make sure inflation slows again,” she said.
The euro is trading around $1.0542 in the morning versus $1.0547 in the previous session.
The value of the single European currency is now around 143.74 yen, up from 143.91 yen on Friday. The dollar is at 136.37 yen against 136.46 yen at the end of the previous trading day.
The DXY index, which shows the value of the U.S. dollar against six major world currencies, is up 0.06%. The WSJ Dollar, which tracks the dollar’s trend against 16 currencies, rose by a similar amount.
The pound is trading at $1.1938 compared to $1.1942 on the previous trading day. The euro is at Friday’s closing level of $0.8831.
“The environment is a bit nervous” as the market is unsure of the Fed’s future actions, noted Bank of Singapore currency analyst Moh Siong Sim. “Will they raise the rate by 25 basis points? Or will they be forced to increase the pace of the hike? There is no definite answer right now,” he said.
