Dollar falls back from 16 month high as U.S. economic data

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Dollar falls back from 16 month high as U.S. economic data

TOKYO, Nov 15 Reuters -- The dollar fell back from near an almost 16 month high against major peers on Monday as traders waited for further clues 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, fell 0.13% to 95.012 from Friday, after posting its biggest weekly gain since August and reached 95.266 for the first time since July 2020.

The main event on the U.S. economic calendar this week will be Tuesday's retail sales data, particularly after a survey on Friday showed consumer confidence plunged to a decade low in early November as high inflation hit sentiment.

It will be important to watch what still cashed-up U.S. consumers do rather than what they say, as 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 dollar was on a tear since Wednesday when data showed a broad-based rise in consumer prices in the U.S. last month at the fastest annual pace since 1990, casting doubt on the Fed's stance that price pressure will be transitory.

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

The euro rose by 0.13% to $1.1457, but was still within sight of Friday's 16 month low of $1.1433.

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

The dollar fell by 0.07% to 113.825 yen, consolidating around 114 since Wednesday.

The pound was up 0.19% to $1.3434, continuing a recovery from the low of $1.3354, which was marked on Friday.

The risk-sensitive Australian dollar rose 0.17% to $0.7425, supported by better-than-expected Chinese retail sales and industrial output readings on Monday. The currency climbed 0.54% on Friday as it rebounded from a more than one-month low of $0.7277 reached the same day.

Investors will be watching for comments coming out of a virtual summit between Chinese leader Xi Jinping and U.S. President Joe Biden.