Euro fell in European trade against dollar for fourth straight session, hitting two-week lows on profit-taking off nine-month highs. 

The common currency is still on track for the fourth monthly profit in a row as the ECB commits to its stance of aggressive policy tightening. 

EUR/USD fell 0.3% to 1.0812, the lowest since January 20, with a session-high at 1.0860. 

Euro closed down 0.2% yesterday, the third profit in a row off nine-month highs at 1.0929. 

Monthly Trades

Euro is up 1% so far against dollar in January on track for the fourth monthly profit in a row, the longest such streak since May 2020. 

The strong gains came as concerns about a widening policy gap between the US and Europe fade with the ECB preparing for a 0.5% rate hike, compared to a 0.25% rate hike by the Fed. 

The ECB

ECB President Christine Lagarde said recently that inflation remains too high and the bank is committed to continuously increase interest rates until inflation is brought back to 2%.

Lagarde once again repeated the use of the phrase "staying the course" when talking about interest rate decisions at upcoming meetings, meaning the current pace will be maintained at least until the second quarter of the year.

Other ECB members strongly hinted at multiple 0.5% rate hikes in both February and March.

Estimates

Despite current losses, analysts still expect the euro to pierce $1.1 in the short term as the ECB prepares a rate hike that's double the hike of the Fed.

Broadly, the euro is expected to advance against most major rivals to year-highs.

How would higher interest rates impact euro?

Naturally, euro is expected to extend gains against a basket of major rivals as the ECB prepares consecutive policy hikes this year.

Gold prices fell on Monday as the dollar advanced against a basket of major rivals and amid speculation for the Federal Reserve's upcoming meeting. 

A batch of corporate results will be released this week, on top of which Apple, Meta, Amazon, Alphabet, and Twitter. 

The dollar index rose 0.2% to 102.1 as of 18:36 GMT, with a session-high at 102.2, and a low at 101.6. 

Gold spot prices fell 0.3%, or $6.20 to $1,923 as of 18:38 GMT. 

Gold Prices 

Now markets await important policy meetings by major central banks in the US, UK, and Europe this week.

All are expected to increase interest rates and extend their tightening policies to control stubbornly high prices.

US stock indices closed lower on Monday as markets await important corporate results and the Fed's policy meeting. 

A batch of corporate results will be released this week, on top of which Apple, Meta, Amazon, Alphabet, and Twitter. 

Dow Jones fell 0.1%, or 40 points to 33,938, while S&P 500 shed 0.1%, or 40 points to 33,938, as NASDAQ gave up 1.7%, or 200 points to 11,421. 

What's awaited for this week? 

Now markets await important policy meetings by major central banks in the US, UK, and Europe this week.

All are expected to increase interest rates and extend their tightening policies to control stubbornly high prices.

Copper prices fell on Monday as investors assess Chinese demand as Beijing eases Covid 19 restrictions. 

Copper futures at the Shanghai Exchange fell 1.2% to 69.320 thousand yuan a tone, or $10.262 thousand a tone, while three-month copper futures fell 0.7% at the London Exchange to $9,197 a tone. 

Copper prices rallied 28% since July 2022 at the London Exchange, and by 33% at the Shanghai Exchange on hopes for improving Chinese demand after easing its Covid 19 policies.

Despite that, copper prices didn't gain much ground this month as Chinese factory activity dropped in January compared to December. 

The dollar index stabilized at 101.9 as of 15:28 GMT, with a session-high at 102.04, and a low at 101.6. 

Copper futures due in March were down 0.3% as of 15:28 GMT to $4.21 a pound. 

What's Next? 

Now markets await important policy meetings by major central banks in the US, UK, and Europe this week.

All are expected to increase interest rates and extend their tightening policies, which could prop up the dollar and pressure copper prices.