LONDON, May 3 Reuters The dollar retreated after its recent bounce on Monday as investors made a cautious start to a week crammed with central bank meetings and bigticket U.S. economic data, waiting for clues on the global inflation outlook and policymakers responses.
Trade was thinned by holidays in Japan, China and Britain, which kept a lid on volatility, leaving the greenback to trade where it settled after a Friday leap. It slid back to 1.2054 per euro and crept to a threeweek high of 109.66 yen .
Comments by Luis de Guindos, the European Central Banks vice president, helped the euro gain against the dollar at the start of the London session. The ECB can start to phase out emergency stimulus measures when the pace of coronavirus vaccinations reaches a critical level and the economy picks up speed, he told an Italian newspaper.
The dollar index, measured against six major currencies, fell back to 91.097 by midday in London, down from an earlier Asian session high of 91.390.
The index dropped 2 through April as a positive view of global recovery prospects lifted tradeexposed currencies at the dollars expense, but bounced with upbeat U.S. consumption data on Friday.
We remain bearish USD linked to peak US exceptionalism, and a broadening global recovery elsewhere, said CitiFX analysts Ebrahim Rahbari and Calvin Tse in a note to clients.
We attribute the USD rebound late last week in part to noise around monthend flows, but note the risk for higher US rates to…