NEW YORK, Jan 9 (Reuters) – The U.S. dollar on Monday fell to its weakest level in seven months against the euro as traders bet recent economic data would prompt the Federal Reserve to slow the pace of rate hikes, while risky currencies benefited from China reopening borders.
The euro was up 0.95% at $1.0745 at 10:30 a.m. EST (1730 GMT), its highest versus the greenback since June 9, adding to Friday’s 1.17% increase.
Sterling rose 0.72% to $1.218 against the dollar, building on Friday’s 1.5% rally, while the Swiss Franc surged 1.1% to $0.9174, its strongest since early March.
The moves continued the trend lower for the dollar, which in the final three months of 2022 posted its biggest quarterly loss in 12 years. That was driven mainly by investors’ belief that the Fed will not raise rates beyond 5%, from its current range of 4.25%-4.50%, as inflation and growth cool.
“The Fed will be taking last week’s…