US Dollar Holds Steady as Markets Await Inflation Data and Fed Comments

US Dollar Stable as Market Awaits US Inflation and Fed Insights

The US dollar opened cautiously on Monday, reflecting market anticipation for upcoming US inflation data and insights from Federal Reserve speakers. Meanwhile, China’s recent stimulus package has left the yuan subdued, impacting the currencies of key trading partners.

China’s Economic Signals Raise Concerns

Data released over the weekend highlighted China’s economic struggles, with consumer price growth at a four-month low and producer price deflation worsening. Retail sales and industrial output reports, expected this Friday, will reveal whether Beijing’s stimulus efforts are affecting domestic demand. Underwhelming results from these measures saw the Australian and New Zealand dollars decline on Friday, as both countries depend heavily on Chinese exports.

Currency Movements and Fed Influence

The dollar hovered near 7.1970 yuan and could soon test the 7.2000 mark. In limited US trading due to a bond market holiday, the dollar rose by 0.1% against the yen, reaching 152.90. The dollar index saw a slight uptick, sitting at 105.00 after a 0.6% gain last week, with the euro stable at $1.0711, facing resistance around $1.0667.

European and US Policy Impact

The euro is under pressure amid Germany’s political uncertainties, as Chancellor Olaf Scholz considers a confidence vote that could lead to early elections. Market attention is also on the US Federal Reserve, with Chair Jerome Powell and other officials scheduled to speak this week. Investors are watching for signals on future rate adjustments as inflation data could influence Fed policy in December.

For further reading, you can check out the following sources:

1. US Dollar Holds Gains as Investors Await Fed Comments and Inflation Data
2. China’s Stimulus Efforts Fall Short as Inflation Slows, Yuan Impacted
3. Euro Weakens Amid Political Turmoil in Germany, US Dollar Remains Firm