LONDON (Reuters) – The euro fell a third of a percentage on Monday as investors took profits after a recent rise although currency markets remained bullish on the outlook for the single currency in the context of a economic recovery strengthened.
With the exchange markets extending the theme of "selling dollars" since the end of last year and the Asian shares advancing towards historic highs, some investors opposed the fall of the euro as an opportunity to buy the single currency.
"The outlook for the Fed has already been quoted in the market, so the uncertainty is around the ECB's policy, although low inflation and a strong euro will certainly be a concern for politicians," said Kenneth Broux, FX strategist at Societe. Generate in London.
Instant inflation estimates for December across the euro zone were printed at 1.4 percent last week, slightly slower than the 1.5 percent in the previous month and well below a target of BCE
The scarce inflationary pressure in Europe has been accompanied by an increasing economic recovery throughout the continent and an improvement in China and the United States, which feeds the appetite for risk.
"The general economic trend is meticulously favorable for the US dollar, as we are seeing a global recovery led by China and Europe and there is a lot of cash sitting on the sidelines hoping to buy European assets," said Peter Chatwell, director of the European rates strategy at Mizuho International in London.
Friday's US non-farm payrolls increased 148,000 jobs last month, against the broader expectations of a 190,000-job increase, although an unchanged jobless rate remained stable in a low 4.1 percent year. a solid labor market.
Positioning data showed net positions in dollars against a wider basket of currencies, including some emerging market currencies, not far from a minimum of 5 years reached in October.
The euro fell 0.3 percent to $ 1.1988 after rising more than 2 percent in the past three months. It was not far from a four-month high of $ 1,2092 reached in September.
The US currency had started on the defensive 2018, after the dollar index fell around 9.9 percent in 2017, its weakest performance since 2003.
A synchronized global recovery has caused the central banks of other countries
begin to move towards a tighter monetary policy in recent months, helping to boost their currencies.
After the employment data of the USA. UU., The operators of US short-term interest rates futures. UU They continued to bet that the Fed would raise rates twice this year, including a likely increase in March.
Comments from some Fed officials on Friday and the weekend suggested that the US central bank. UU It remained on track to raise interest rates by 2018.
San Francisco Fed President John Williams said in an interview on Saturday that the Fed should score three times this year given that the already strong economy will be driven by tax cuts, and can be adjusted more or less aggressively if necessary.
Against a broad basket of currencies, the dollar rose 0.3 percent higher on the day.
For the Reuters Live Markets blog on the stock markets of Europe and the United Kingdom, see reuters: // realtime / verb = Open / url = http: //emea1.apps.cp.extranet.thomsonreuters.biz/ cms /? PageId = livemarkets  Saikat Chatterjee report; Edition by Peter Graff