The dollar traded at 109.87 yen. It touched 110.20 on Friday, getting within striking distance of the one-year peak of 110.97 recorded at the end of March.
The U.S. inflation data also pushed the dollar higher versus other currencies shortly. However, the currency goes out of steam ahead of a long weekend in New York and London.
The euro switched hands at $1.2194, off Friday’s low of $1.2133, while the British pound reached little changed at $1.4189.
U.S. consumer prices rose in April. The measure of underlying inflation went past the Federal Reserve’s 2% target. Hence it had its most significant yearly gain following 1992, due to a recovery from the epidemic and several supply disruptions.
The core personal consumption expenditures (PCE) price index, the Federal Reserve’s favored measure of inflation, increased 3.1% from a year ago. It went a tad over market expectations of a 2.9% increase.
Although the high reading was owing partly to the base effect – prices were discouraged in April 2020 because of strict lockdowns. Moreover, its yearly rise is supposed to moderate later this year, some investors remained worried.
For now, though, the data had a limited impact on investors’ expectations that the Federal Reserve will keep the current pace of asset acquisition for many months, probably by the end of the year, before reducing it.
U.S. debt yields fell in a shortened session on Friday before a long weekend as month-end buying overcame data.
The 10-year U.S. Treasuries yield fell 2.9 basis points to 1.581%, marking the second continuous month of declines after increasing sharply earlier this year on fear of inflation.
However, with significant Fed officials now openly supporting the need to consider tapering. Furthermore, additional signs of strength in the U.S. economy, such as Friday’s payroll data, could stoke debate about tapering, analysts stated.
Subsequently, the Chinese yuan continued to firm near its three-year high of 6.3590 per dollar on Friday. It traded at 6.3655 in offshore trade.
A poll on China’s manufacturing sector due later Monday is the next most significant center.
In volatile cryptocurrencies, bitcoin was a little altered over the weekend. It traded at $35,864 after casually hitting a one-week low of $33,425. Meantime, ether endured at $2,407.
Bitcoin was falling 38% so far in the month. This would be its most significant drawdown after 2011, while ether has missed 13%.