DXY Reverses from Near 6-Month Low

The dollar index rose to above 105 on Monday, having touched an almost 6-month low at 104.11 earlier in the session, on renewed prospects for a more aggressive Federal Reserve following better-than-expected economic data.

Investors see a chance that the peak for the Fed funds will be higher than expected, after a US services gauge rose unexpectedly in November, adding to last week's stronger-than-anticipated US jobs report.

Money markets are currently pricing in a terminal rate of close to 5% in the middle of 2023.

Still, last week, Fed Chair Powell pledged to scale down the pace of rate increases.