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Dollar Stabilizes Near 7-Month Lows


SINGAPORE/LONDON—The dollar steadied near its softest in seven months against the euro on Tuesday after more hawkish comments overnight from two U.S. Federal officials helped it to stem its recent losses ahead of remarks by Fed chair Jerome Powell due later in the day.

The euro was unchanged at $1.0736 on Monday, trading below its seven-month high, 1.07605 reached Monday. Sterling was down 0.1 percent at $1.2165, just below Monday’s three-week top.

The dollar is sliding as the markets doubt that the Fed would raise interest rates beyond 5 percent to combat inflation. After last year’s rate increases, the effects have already begun to show in their currency.

Last week’s employment report showed that while the U.S. economy added jobs at a solid clip in December, it also recorded a slowdown in wage growth.

Separate data indicated that services activity was weaker. Investors now expect rates will peak at just below 5 percent by June and then begin to fall later in the calendar year.

Many Fed officials insist that rates are still high and have room for improvement. Raphael Bostic (Atlant Fed Bank President) and Mary Daly (San Francisco Fed President) will take turns on Monday.

“Markets realised they had moved quite far quite quickly and there are some risk events on the…

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