Photo: U.S. dollars banknotes at the Ninja Money Exchange, operated by Interbank HD, in the Shinjuku district of Tokyo, Japan, on June 9, 2022. Photographer: Toru Hanai/Bloomberg U.S. dollar banknotes at the Ninja Money Exchange, operated by Interbank HD, in the Shinjuku district of Tokyo, Japan, on June 9, 2022. Photographer: Toru Hanai/Bloomberg

The U.S. dollar’s pullback in recent days is prompting speculation about whether the currency’s march higher is coming to an end. Still, there’s a reluctance to write it off just yet.

After surging by more than 10 percent this year, the Bloomberg’s dollar gauge has dropped about 2 percent from last week’s high, even as bets on how far the Federal Reserve will raise interest rates have nudged up. A key focus now is U.S. inflation data due Tuesday. While a weak number may see traders trim rate-hike bets, that might not spell doom for the dollar given its haven appeal and a still-hawkish Fed.

“We’re reaching another point of people arguing ‘peak dollar, peak dollar, peak dollar—and it’s about to turn,’ ” Paul Mackel, head of global foreign-exchange research at HSBC Holdings Plc in Hong Kong, said on Bloomberg Television. “Personally, I think it’s too early. It’s going to persist for awhile yet. The underlying conditions for that change in the dollar’s direction aren’t there.”

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