Dollar up, shruggs off negative U.S. data; Euro-dollar parity expected

The dollar was widely supported on Tuesday, after last week’s strong U.S. jobs report raised the odds that the Federal Reserve hikes interest rates in December. Weak data on import prices in the U.S. hardly impacted the greenback.

The U.S. Bureau of Labor Statistics said in a report U.S. import prices decreased by a seasonally adjusted 0.5% last month, compared to forecasts for a 0.1% drop. Import prices fell by 0.6% in September. However, market players believe this is unlikely to prevent the Federal Reserve from raising interest rates in December, which it seems increasingly keen to do.

EUR/USD last traded at 1.0696, down 0.58%. The euro also declined against the pound with EUR/GBP last seen at 0.7077, down 0.51%.

GBP/USD was unchanged at 1.5114, down 0.01%.

The euro has been weak as investors anticipate fresh stimulus measures from the ECB soon. The political turmoil in Lisbon also weighs on the single currency.

Some market players now predict euro-dollar parity, as monetary policy on either side of the Atlantic prepares to diverge.