After central banks sought to push back against rising rate hike expectations last week, sending the euro and the pound tumbling, currency markets have settled back into another spell of low volatility.
The euro stood at $1.1587, unchanged on the day, and the dollar index at 94.001, also little moved.
Adam Cole, currency analyst at RBC Capital Markets, remains constructive on the dollar. That is based on a “purely vanilla nominal rates story” predicated on his prediction that the divergence in rate expectations with the U.S. would soon shrink, supporting the dollar.
“We will get better direction when we get to the U.S. CPI,” he said, referring to data due out on Wednesday.
The data is expected to show U.S. consumer prices galloped and Chinese factory gate prices soared in October.
Ahead of the inflation data, a slew of central bankers are due to speak later on Tuesday, including European Central Bank President Christine Lagarde at 1300 GMT and Fed chair Jerome Powell at 1400 GMT.
