The dollar held near a two-month high against the yen on Monday after a key measure of U.S. inflation showed stronger price gains than expected, keeping alive expectations of an eventual tapering in the Federal Reserve’s asset buying

The Chinese yuan, which has been supported by a strong economic recovery, extended a recent rally to three-year highs even as Chinese authorities appeared to try to curb its rise.

The dollar ticked down 0.2% to 109.64 yen in a trade dominated by month-end dollar selling from Japanese exporters, but stood not far from Friday’s peak of 110.20, which was its highest since early April.

The U.S. inflation data released on Friday also briefly drove the greenback higher against other currencies that day, though the currency ran out of steam ahead of a long weekend in New York and London.

The euro was little moved at $1.2203, off Friday’s low of $1.2133, while the British pound barely moved at $1.4199.

U.S. consumer prices surged in April, with a measure of underlying inflation blowing past the Federal Reserve’s 2% target and posting its largest annual gain since 1992, due to a recovery from the pandemic and various supply disruptions.
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