US Dollar near the highest level in 7 weeks

The dollar settled near its highest level in seven weeks on Monday, after a batch of US economic data supported expectations that the Federal Reserve should continue raising interest rates for a longer period.

Data on Friday showed a sharp rise in US consumer spending in January as inflation accelerated. The personal consumption expenditures index, the Fed’s preferred measure of inflation, rose 0.6% last month after gaining 0.2% in December.

The dollar index, which measures the performance of the US currency against six major currencies, rose 0.038 percent to 105.21, close to a seven-week high of 105.32, which it touched on Friday, after the publication of higher-than-expected data.

The index rose 3 percent in February and is set to end a four-month losing streak as investors revise their expectations that U.S. interest rates will continue to rise for a longer period.

Markets are now digesting the possibility that interest rates will peak at 5.4 percent in July and remain above 5 percent until the end of the year.

The euro was little changed near its lowest level in seven weeks of $1.0536, which it recorded on Friday. The pound sterling was last traded at $1.1943, down 0.01 percent on the day.

The Japanese yen rose 0.12 percent to 136.29 yen per dollar, after falling to a more than two-month low of 136.58 yen earlier in the session.

The Australian dollar lost 0.25% to $0.671, after approaching a two-month low of $0.6705. The New Zealand dollar fell 0.28 percent against the US currency, to $ 0.614.