Investing.com – The US dollar rose on Monday, remaining at high levels after stronger-than-expected US payrolls data, while sterling continued to struggle for friends.

At 04:35 ET (09:35 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.4% higher at 109.930, after hitting its strongest level since October 2022 on Friday.

The dollar company is ahead of the CPI

The dollar received a boost after Friday’s data showed US growth unexpectedly accelerated in December as it fell to 4.1%, leaving traders to scale back bets on Federal Reserve rate cuts. this year.

Markets are now pricing in 27 basis points worth of Fed rate cuts this year, up from roughly 50 bps at the start of the year.

“Friday’s strong US jobs release gave the dollar a high level. It’s hard to see a trend going forward. aka a strong set of US inflation data, which will further raise the question of whether the Fed should cut rates this year,” ING analysts said in a note.

Wednesday saw the release of December inflation in the US, and any upside surprise could threaten to close the door to elimination altogether.

Sterling remains weak

In Europe, it traded 0.7% lower at 1.2117, with sterling falling to a 14-month low, after falling 1.8% last week, amid growing concerns about Britain’s finances, which prompts an increase in the cost of borrowing.

“Sterling continues to trade on a soft foot and its losses could extend this week,” ING added. “Wednesday is the most important day for sterling given that when December UK CPI data is released. Sterling could take a hit regardless of the number that comes out. Sticky inflation and what it means for the cycle of the Bank of England could spell big trouble for the UK gilt market.

fell 0.4% to 1.0195, falling to the weakest level since October 2022, with widely expected to ease interest rates by about 100 basis points in 2025, with most of the cuts coming in the first half of the year as that inflation is seen heading towards the bank’s 2% target by mid-2025.

“With US rates on the rise and the dollar doing so well (up 8% since late September) it’s no surprise to hear some central bankers are less dovish to provide some support to their money,” said ING.

“However, in Hong Kong today, the Chief Economist of the European Central Bank Philip Lane prefers to say that without further cuts in rates, the ECB’s inflation target will be at risk. So it seems that the ECB will not especially concerned with the soft level of EUR/USD as the calls for parity are stronger.

Yuan’s support was lacking

In Asia, it fell 0.3% to 157.23, with volumes hit by the holiday in Japan, and as traders remain uncertain of a meeting.

rose 0.3% to 7.3574, even as data showed China grew more than expected in December, helped by outsized exports.

But the reading was largely tied to exporters preloading their cargoes ahead of US President-elect Donald Trump imposing high trade tariffs on the country. Trump – who takes office on January 20 – has promised to impose tariffs on China from “day one” of his presidency.