By Gina Lee
Investing.com – The dollar was down on Monday morning in Asia, remaining below an almost 16-month high. Investors now await the next clues on the status of the U.S. economic recovery from COVID-19 after the brought forward bets for a U.S. Federal Reserve interest rate hike during the previous week as inflation continues to skyrocket.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged down 0.13% to 95.007 by 23:32 PM ET (4:32 AM GMT).
The USD/JPY pair inched up 0.01% to 113.86, after Japan’s third-quarter GDP contracting by a larger-than-expected 3% year-on-year and 0.8% quarter-on-quarter.
The AUD/USD pair edged up 0.16% to 0.7344, with the Reserve Bank of Australia releasing the minutes from its November meeting on Tuesday. The NZD/USD pair inched up 0.03% to 0.7049.
The USD/CNY pair inched up 0.05% to 6.3819. Chinese data released earlier in the day showed that fixed-asset investment grew 6.1% year-on-year, industrial production grew 3.5% year-on-year and retail sales grew 4.9% year-on-year in October. The unemployment rate remained unchanged at 4.9%.
Chinese President Xi Jinping will also reportedly hold a virtual summit with U.S. counterpart Joe Biden.
The GBP/USD pair edged up 0.11% to 1.3428.
U.S. data released during the previous week showed that the consumer price index grew at its fastest annual pace since 1990, giving the dollar boost. Investors are now doubting the Fed’s insistence that inflationary pressures will be temporary, pricing the first rate increase by July 2022 and a high likelihood of another by November 2022 as of the end of last week.
Investors now await U.S. retail sales data, which will be released on Tuesday. "It will be important to watch what still cashed-up U.S. consumers do rather than what they say," considering readings of sentiment were at odds with actual spending during the summer, National Australia Bank (OTC:NABZY) head of FX strategy Ray Attrill said in a note.
The dollar index, which is heavily euro-weighted, has also been boosted by the euro's drop as the European Central Bank (ECB) will not likely change its current dovish tone. The euro was little changed at $1.14455, remaining near Friday's 16-month low of $1.1433. ECB president Christine Lagarde will also speak before the Committee on Economic and Monetary Affairs of the European Parliament later in the day.
Should you invest $2,000 in NABZY right now?
With NABZY making headlines, savvy investors are asking: Is it truly valued fairly? In a market full of overpriced darlings, identifying true value can be challenging. InvestingPro's advanced AI algorithms have analyzed NABZY alongside thousands of other stocks to uncover hidden gems. These undervalued stocks, potentially including NABZY, could offer substantial returns as the market corrects. In 2024 alone, our AI identified several undervalued stocks that later surged by 30 or more. Is NABZY poised for similar growth? Don't miss the opportunity to find out.
Reveal Undervalued Stocks Now