Dollar hits seven-month low vs euro on expectations of slower Fed hikes

Dollar hits seven-month low vs euro on expectations of slower Fed hikes

New York: The US dollar on Monday fell to its weakest level in seven months against the euro as traders bet recent economic data would prompt the Federal Reserve to slow the pace of rate hikes, while risky currencies benefited from China reopening borders. The euro was up 0.95 per cent at $1.0745 at 10:30am EST (7.30pm UAE time), its highest versus the greenback since June 9, adding to Friday’s 1.17 per cent increase. Sterling rose 0.72 per cent to $1.218 against the dollar, building on Friday’s 1.5 per cent rally, while the Swiss Franc surged 1.1 per cent to $0.9174, its strongest since early March. The moves continued the trend lower for the dollar, which in the final three months of 2022 posted its biggest quarterly loss in 12 years. That was driven mainly by investors’ belief that the Fed will not raise rates beyond 5 per cent, from its current range of 4.25-4.50 per cent, as inflation and growth cool. “The Fed will be taking last week’s data as broadly positive, an affirmation that its rate hikes are starting to have their intended effect - even if the labour market remains robust,” said Richard Flax, chief investment officer