Investing.com – The U.S. dollar slips slightly from the recently reached one-year high at the start of a week that is light on major economic data but includes comments from a series of Fed speakers. 

At 04:50 ET (09:50 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 106.497, just off its one-year top of 106.72. 

The index climbed 1.6% over last week, marking six weeks of gains in the last seven.

Dollar retains strength 

The dollar has benefited from a structural bullish shift since Donald Trump’s election near the start of the month, and the macro story hasn’t really offered any reason for second thoughts.

“Inflation data has been hotter than the Federal Reserve’s target would tolerate, and Chair Jerome Powell added a layer of caution on future easing in a speech last week,” said analysts at ING, in a note.

“With very little extra information on the US economy being added this week, the market-implied policy divergence between the Fed and most other G10 central banks could mean that any positioning-led correction will be short lived.”

There are at least seven Fed speakers on the agenda this week, starting later Monday with Chicago Fed President . Although he is regarded widely as more of a dove, most of the officials are expected to sound cautious on aggressive cuts.

Futures imply a 60% chance of the Fed easing by a quarter-point in December and have only 77 basis points of cuts priced in by late 2025, compared with more than 100 bps a few weeks ago.

Euro heading lower

In Europe, traded 0.3% higher to 1.0568, ahead of speeches from a series of European Central Bank officials, including President .

These speakers are likely to sound pretty dovish, even after preliminary figures for October, released last week, showed the bloc grew faster than market watchers expected in the third quarter.

That said, quarterly growth of 0.4% showed the eurozone economy remained fragile, with the largest component – the German economy – particularly weak.

ECB officials will also have to factor in the risk of tariffs hitting EU trade after the election of Donald Trump to the US presidency.

The week ends with the release of the latest activity data for the eurozone, and this will be carefully studied by traders.

“PMIs have become an increasingly important release for the eurozone after the European Central Bank shifted the focus from inflation to growth and is now taking a broader range of soft activity data into account,” ING added.

edged higher to 1.2622, ahead of the release of UK data for October on Wednesday.

Economists expect the annual rate of inflation to have risen 2.2%, which would be an increase from 1.7% in September, the first time the annual rate of inflation dropped below the BoE’s 2% target in more than three years.

The BoE delivered a second 25-basis point rate cut earlier this month and said further cuts were likely to be gradual in the wake of the first budget of Britain’s new government.

Ueda declines to signal a December hike

rose 0.2% to 154.64, after Bank of Japan Governor reiterated that interest rates would continue to rise gradually but made no mention of whether a hike would come in December.

The lack of clear guidance saw the yen retreat, after it had strengthened late last week after Japanese Finance Minister Katsunobu Kato warned about possible intervention if the yen fell too far and too fast.

climbed 0.2% to 7.2416, just off a three-month high, with sentiment towards China strained by the prospect of high U.S. trade tariffs against the country, under a Trump administration.

By Wayne Cole and Harry Robertson

SYDNEY/LONDON (Reuters) -The dollar climbed against the yen on Monday after Japan’s top central banker flagged further monetary policy tightening ahead but left open the question of timing, while the euro steadied after falling to a one-year low late last week.

Bank of Japan Governor Kazuo Ueda reiterated that interest rates would continue to rise gradually should the economy develop in line with the central bank’s outlook, in his first opportunity to speak directly on monetary policy since Donald Trump’s victory in the U.S. presidential election on Nov. 5.

However, he made no mention of whether a hike would come in December, saying the BOJ would need to pay attention to various risks, including for the U.S. economy.

The lack of clear guidance saw the dollar rise 0.62% to 155.12 yen and away from Friday’s low of 153.86. It pulled back late last week after Japanese Finance Minister Katsunobu Kato on Friday put the market on warning of possible intervention if the yen fell too far and too fast.

“Market participants were watching closely to see if he would give any clear signal that the BoJ are planning on raising rates one more time this year,” said Lee Hardman, currency analyst at MUFG. “However, Governor Ueda refrained from providing any clear signal.”

The market was pricing a roughly 54% chance of a quarter-point hike at the next policy meeting on Dec. 19, little changed from before the speech.

Against a basket of currencies the dollar held at 106.77, having touched a one-year top of 107.07 on Friday. The index climbed 1.6% last week, marking six weeks of gains in the last seven.

The rally has coincided with a 70-basis-point surge in 10-year Treasury yields since the start of October, fuelling a 5.4% rise in the as U.S. bonds have become more attractive.

EURO STEADIES, EYES ON TARIFFS

The euro was last flat at $1.0537 , although it remained uncomfortably close to Thursday’s one-year trough of $1.0496.

Trump’s election victory has caused the euro to slump as investors have priced in the potential for tariffs on the European Union and China, a key European trading partner. Investors and analysts have begun to talk of a possible fall to parity, where one euro equals a dollar.

“If we’re looking next year, I think it’s fair to think we could be trading close to parity or at parity, it really depends on the implementation of the protectionist agenda by Trump,” said Francesco Pesole, currency strategist at ING.

Markets are eager to hear who Trump will pick as Treasury Secretary, with numerous media reports saying the president-elect has extended the list of potential candidates to include former Federal Reserve governor, Kevin Warsh, and billionaire executive Marc Rowan.

Analysts generally assume Trump’s touted policies of tariffs, reduced immigration and debt-funded tax cuts will be inflationary, limiting the scope for further rate cuts by the Federal Reserve.

Sterling has also suffered under the dollar’s recent strength, dropping around 2.5% since the election, but held steady on Monday at $1.2622.

At least seven Fed officials are due to speak this week as well as a number of European central bankers.

The data calendar for the U.S. is light this week, but the UK, Japan and Canada all have important inflation reports due, while manufacturing surveys out late in the week will offer a clue to how sentiment is faring since the U.S. election.

Investing.com– Most Asian currencies moved little on Friday and were nursing losses for the week, while the dollar steadied at a one-year peak and was set for a strong week as markets dialed back bets on lower U.S. interest rates. 

The dollar was headed for a sixth straight week of gains as it extended its rally on Donald Trump’s election victory from last week. Less dovish statements from the Federal Reserve and strong U.S. inflation readings added to the greenback’s strength. 

This trend weighed heavily on most Asian units, with middling economic readings from China and Japan adding to the negative sentiment on Friday.

Dollar strong as rate cut bets recede on inflation, Powell comments 

The and both rose 0.1% on Friday and were close to a one-year peak hit earlier in the week.

The greenback was up between 1.6% and 2% this week, its best week since end-September.

Gains in the dollar were initially driven by Trump’s election victory, with expansionary policies under his administration expected to drive up inflation in the long term.

In the near-term, sticky and inflation readings spurred doubts over future rate cuts by the Federal Reserve, especially as Chair Jerome Powell said resilience in the U.S. economy gave the central bank more time to consider cutting rates.

His comments saw traders sharply dial back expectations for a 25 basis point cut in December. 

Japanese yen fragile, USDJPY crosses 156 after weak GDP 

The Japanese yen weakened further on Friday, with the pair trading above 156 yen and at its highest level in over three months. 

data for the third quarter showed Japanese economic growth slowed sharply from the prior quarter. While remained strong, weakness in other sectors of the economy, especially in exports and investment, weighed on growth.

The also grew less than expected in Q3, indicating that inflation growth slowed during the quarter. 

Friday’s data drove up hopes that weakness in the economy will keep the Bank of Japan from raising interest rates further- a scenario that bodes poorly for the yen. 

Broader Asian currencies were fragile and headed for weekly losses. The Chinese yuan’s pair rose 0.1% and was set for a seventh straight week of gains.

Chinese missed expectations, while grew more than expected in October on the Golden Week holiday. But overall economic conditions in the country still remained week, with recent stimulus measures largely underwhelming markets.

Focus is now on a potential cut by the People’s Bank next week. 

Concerns over China saw the Australian dollar weaken, with the pair hovering around a three-month low. 

The Singapore dollar’s pair fell 0.1%, while the South Korean won’s pair fell 0.2%. Both currencies were headed for losses this week.

The Indian rupee’s pair steadied after hitting record highs this week.