The US dollar surged in early European trade, trading around a five-week high on concerns that the Federal Reserve will continue to raise interest rates.
The Dollar Index, which measures the value of the US dollar against a basket of six other currencies, was 0.1% higher at 102.802, having previously reached a more than one-month high of 103.02.
The dollar has been in demand after statistics revealed that US producer prices grew more than expected in July, adding to the previous day’s small increase in consumer prices.
These figures sparked concerns that the Federal Reserve may continue to raise interest rates when it meets again in September, even though markets still broadly expect the Fed to conclude its rate hike cycle then.
The economic data is mostly empty on Monday, but July retail sales are coming on Tuesday, and they are likely to reflect a rebound in demand at the start of the third quarter following a smaller-than-forecast gain in June.
