Dollar Rises as US Inflation Data Approaches

The dollar started a data-packed week on the rise, with the immediate focus shifting to US inflation data, but investors are also concerned that the US Federal Reserve is preparing to exit its hyper-supportive stance even as COVID-19 infections rise.

The dollar rose in Asian trading after recording its best weekly performance in three weeks on Friday, taking advantage of the flows looking for safe havens and policy expectations that raised US Treasury yields.

The moves were modest, but the euro fell again below $1.18 to $1.1792. The dollar also made modest gains against the Australian and New Zealand dollars and marginal gains against the yen and the British pound, to reach in the latest trading of 109.96 yen.

The Australian dollar fell 0.2% to $ 0.7337 and is facing difficulties to consolidate above $ 0.74, while the New Zealand dollar fell 0.4% to $ 0.71 as the closure was extended in Auckland until midnight of the twenty-first of September. The dollar index rose 0.1% to 92.739.

US consumer price data is the next big focus for foreign exchange traders, along with retail sales and production data due later in the week as it determines the progress the economy has made ahead of the Fed’s September 21-22 meeting. Core consumer price inflation is expected to slow to 4.2%.

The yuan fell slightly to 6.4550 per dollar, in line with the performance of stocks after news of Beijing’s latest regulatory measures against the technology sector. Sterling fell 0.1% to $1.3816, while cryptocurrencies came under pressure.