Dollar below 16 month high on U.S. economic calendar

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Dollar below 16 month high on U.S. economic calendar

TOKYO, Nov 15, Reuters -- The dollar was below an almost 16 month high versus major peers on Monday as traders waited for more information on the U.S. economy after bringing forward bets for a Federal Reserve interest rate hike on the back of red-hot inflation.

The dollar index, which measures the currency against six peers, was barely changed at 95.120 on Friday, when it posted its biggest weekly gain since August and reached 95.266 for the first time since July 2020.

Tuesday's retail sales data is the main event on the U.S. economic calendar, particularly after a survey on Friday showed consumer confidence plunged to a decade low in early November as high inflation wreaked havoc on sentiment.

It is 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, Ray Attrill, head of FX strategy at National Australia BankAustralia Bank in Sydney, wrote in a client note.

The Fed's position that price pressure will be transitory is doubted by the fact that the dollar has been on a tear since Wednesday when consumer prices in the US rose at the fastest annual pace since 1990, as shown by the broad-based rise in U.S. consumer prices.

The European Central Bank appears unlikely to change its dovish policy settings in the near term because of a slowing economy, which has helped boost gains in the heavily euro-weighted dollar index.

The euro was less changed at $1.14455, keeping it within sight of Friday's 16 month low of $1.1433.

On Monday, the ECB president Christine Lagarde will speak to the Committee on Economic and Monetary Affairs of the European Parliament.

The dollar had moved up slightly to 113.965 yen, a gain of around 114 since Wednesday.

The pound was up 0.08% to $1.3421, continuing a recovery from the low of $1.3354, marked on Friday.

The Australian dollar was stable at $0.7331. It bounced back from a more than one-month low of $0.7277 on Friday, gaining 0.54%.

On Monday, China releases activity data and investors will be watching for any comments coming out of a virtual summit between Chinese leader Xi Jinping and U.S. President Joe Biden.