Tan said: "U.S. interest rates have risen, as the Michigan inflation expectations was stronger than expected, number one, and number two, (Fed officials) seem to be consistently hawkish by emphasizing that the Fed has no plan to cut interest rates." The dollar was up 0.3% against Japan's yen at 136.16, after rising 0.67% last week. Sterling was 0.44% higher at $1.25, rebounding after last week's 1.45% fall. Traders expect the Fed to cut interest rates sharply by the end of the year as U.S. growth slows. But Tan said big cuts are unlikely, and that the dollar could rise as traders change their minds. Other analysts said investors' concerns about the debt ceiling standoff was causing them to buy the safe-haven dollar, ahead of a key meeting between President Joe Biden and congressional leaders on Tuesday. The dollar was last up 0.43% at 19.67 Turkish lira . It earlier jumped to 19.7 for the first time since March 10, when it hit a record high of 19.8 on a volatile trading day. Turkey headed for a runoff vote after President Tayyip Erdogan outperformed projections. The dollar sank 0.56% to 33.79 baht in onshore Thai trading. Thailand's opposition parties secured a stunning election win on Sunday, but it was far from certain whether they will form the next government, with parliamentary rules written by the military junta. Many investors expect the U.S. dollar to continue to decline in the coming months as inflation cools and the Fed pauses its rate hikes. "If you remove the uncertainty around the debt ceiling situation, the sentiment has been turning bearish against the dollar," said Khoon Goh, head of Asia research at ANZ. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates Dollar index ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Harry Robertson and Kevin Buckland; Editing by Jacqueline Wong and Bernadette Baum)
Kevin.Buckland@thomsonreuters.com)) (Updates prices)
By Harry Robertson and Kevin Buckland
LONDON/TOKYO, May 15 (Reuters) - The U.S. dollar fell
slightly from a five-week high on Monday after a period of
strength that has confused analysts.
Meanwhile, The Turkish lira sank to a near record low as
weekend elections looked headed for a runoff, while the Thai
baht rallied after a more decisive election result.
The euro was up 0.24% against the dollar on Monday
at $1.087, rebounding after falling 1.54% the previous week.
That helped send the dollar index , which measures the
greenback against six major peers, down 0.18% to 102.51. That
was just below a five-week high of 102.75 touched earlier in the
session.
Analysts have said many factors could be behind the dollar's
recent strength, including concerns about U.S. inflation, and
fears about the debt ceiling standoff and global economic growth
driving safe-haven buying.
Alvin Tan, head of Asia FX strategy at RBC Capital Markets,
said a pick-up in U.S. bond yields over the last two days had
supported the currency.
U.S. yields rose on Friday and Monday after a University of
Michigan survey of consumers' long-term inflation expectations
jumped to the highest since 2011. That put a possible Fed rate
hike next month back in play, with traders laying down those
odds at 17% .
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