SINGAPORELONDON, Feb 27 Reuters The dollar wavered near a sevenweek high on Monday, as investors took stock of last week39;s strong economic data and rapid reconsideration of where interest rates will peak.

Data on Friday showed U.S. consumer spending rebounded sharply in January, while inflation accelerated.

Traders now expect the Fed to raise interest rates to around 5.4 by the summer, according to pricing in futures markers . At the beginning of February, they envisaged rates rising to a peak of just 4.9.

The euro fell to its lowest level against the dollar since Jan. 6 on Monday as the U.S. currency gained, slipping to 1.053. It then rebounded somewhat and was last up 0.1 to 1.055.

The dollar index , which measures it against six major peers, was last down less than 0.1 at 105.11, after earlier climbing to a sevenweek high of 105.36.

The index is up 3 for February and set to snap a fourmonth losing streak. Expectations of higher interest rates tend to boost a currency, by making the country39;s fixedincome investments look more attractive.

Whereas headline rates are falling, the trend of rising core inflation rates has been unbroken, said Ulrich Leuchtmann, head of FX research at Commerzbank.

Only once we notice a reversal in this data, the fear of inflation currently affecting the market is going to ease.

Friday39;s data showed that the core measure of U.S. personal consumption expenditures inflation, which strips out volatile food and energy costs, came in…