The U.S. dollar edged higher in early European trade Monday, but is on course for a monthly loss as traders weigh up the possibility of an end to the Federal Reserve\u2019s tightening cycle, while the Japanese yen weakened in the wake of the Bank of Japan\u2019s monetary policy shift.<\/p>\n
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At 03:10 ET (07:10 GMT), the\u00a0Dollar Index<\/a><\/span>, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 101.570.<\/p>\n \n The dollar has started the new week on a positive note but is still on course to register a monthly decline of roughly 1%, its second straight losing month.<\/p>\n \n The U.S.\u00a0Federal Reserve<\/a><\/span>\u00a0hiked interest rates last week, but expectations are growing that this could be the last increase of the central bank\u2019s aggressive year-long tightening cycle.<\/p>\n \n Chair Jerome Powell pointed to the importance of upcoming data, with two CPI prints, two jobs reports, and the Employment Cost Index due before the September meeting.<\/p>\n \n The second-quarter\u00a0ECI figure<\/a><\/span>\u00a0came in at 1.0% on Friday \u2013 a drop from 1.2% in the first quarter and a peak of 1.4% in the first quarter of 2022. This suggests the\u00a0inflationary<\/a>\u00a0pressure from rising wages is lessening, adding to the reasons for Fed policymakers to stand still in September.<\/p>\n \n USD\/JPY<\/a><\/span>\u00a0rose 0.5% to 141.88, with the yen extending Friday\u2019s losses after a volatile session after the Bank of Japan widened its yield curve control policy, allowing the\u00a010-year<\/a><\/span>\u00a0yield to move 0.5% around the 0% target.<\/p>\n \n The yen has weakened, after initial gains, as traders decided that this move could result in the\u00a0BoJ<\/a><\/span>\u00a0maintaining its ultra-low rates for longer, especially after the central bank earlier Monday reportedly bought about $2 billion worth of bonds in an unscheduled operation.<\/p>\n \n USD\/CNY<\/a><\/span>\u00a0climbed 0.5% to 7.1482 after data showed that the country\u2019s\u00a0manufacturing sector<\/a><\/span>\u00a0shrank for a fourth straight month in July, indicating that the world\u2019s second-largest economy was still struggling with a post-COVID recovery.<\/p>\n \n This weakness is expected to prompt Beijing to announce further stimulus measures to boost the flagging economy.<\/p>\n \n China’s State Council on Monday announced plans to restore and expand consumption in the automobile, real estate, and services sector, but traders are looking for specifics.<\/p>\n \n EUR\/USD<\/a><\/span>\u00a0edged lower to 1.1014, ahead of the release of key\u00a0eurozone inflation<\/a><\/span>\u00a0and\u00a0growth<\/a><\/span>\u00a0data after European Central Bank President Christine Lagarde hinted at a pause in its tightening cycle as soon as September.<\/p>\n \n German\u00a0retail sales<\/a><\/span>\u00a0fell 0.8% on the month in June, an\u00a0annual drop<\/a><\/span>\u00a0of 1.6%, pointing at continued weakness in the most important economy in the eurozone.<\/p>\n \n Elsewhere,\u00a0GBP\/USD<\/a><\/span>\u00a0rose 0.1% to 1.2860, ahead of the\u00a0Bank of England<\/a><\/span>‘s policy meeting later this week, where expectations are for a quarter-point rate hike.<\/p>\n \n AUD\/USD<\/a><\/span>\u00a0rose 0.6% to 0.6690, while\u00a0NZD\/USD<\/a><\/span>\u00a0rose 0.5% to 0.6193.<\/p>\n \n Source: https:\/\/www.investing.com\/news\/forex-news\/dollar-heads-for-monthly-loss-with-fed-seen-pausing-rate-hikes-3138580<\/p>\n","protected":false},"excerpt":{"rendered":" The U.S. dollar edged higher in early European trade Monday, but is on course for a monthly loss as traders weigh up the possibility of an end to the Federal Reserve\u2019s tightening cycle, while the Japanese yen weakened in the wake of the Bank of Japan\u2019s monetary policy shift. At 03:10 ET (07:10 GMT), the\u00a0Dollar […]<\/p>\n","protected":false},"author":1,"featured_media":742,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-741","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpautop"],"translation":{"provider":"WPGlobus","version":"2.10.10","language":"sv","enabled_languages":["en","nl","es","sv","fr"],"languages":{"en":{"title":true,"content":true,"excerpt":false},"nl":{"title":false,"content":false,"excerpt":false},"es":{"title":false,"content":false,"excerpt":false},"sv":{"title":false,"content":false,"excerpt":false},"fr":{"title":false,"content":false,"excerpt":false}}},"yoast_head":"\r\n<\/h3>\n
Dollar heads for another monthly loss<\/strong><\/h3>\n
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Yen weakens after BOJ shift<\/strong><\/h3>\n
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Yuan slips after weak manufacturing PMI<\/strong><\/h3>\n
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Euro edges lower ahead of key data<\/strong><\/h3>\n