The dollar was staring at a fourth straight session of losses against the euro on Monday as more hawkish comments on European interest rates contrasted with market pricing for a less aggressive Federal Reserve.
The euro crept ahead to $1.0870 and nearer its recent nine-month peak of $1.08875. A break there would open the way to a spike top from last April at $1.0936.
Investors also have around 50 basis points of U.S. rate cuts priced in for the second half of the year, reflecting softer data on inflation, consumer spending and housing. "Additionally, U.S. inflation is seen falling further and faster than the Fed's own projections," he added. "Under this scenario, the USD has scope to fall much further this year."Much the same argument goes for sterling, with markets wagering the Bank of England will hike by half a point to 4.0% at its policy meeting next week.The dollar was thus a shade weaker against a basket of currencies at 101.890 and just a whisker for its recent eight-month trough of 101.510.
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