Stock markets rose and the dollar retreated Monday as investors turned their attention to US inflation data later this week and weigh the prospect of further monetary policy tightening.
The dollar was weaker as investors took profit on the strong gains notched up last week on speculation that the US Federal Reserve will announce a third successive rate increase of three-quarters of a percentage point in September.
“The macro calendar is quiet this week with US inflation data being the main highlight,” said Forex.com analyst Fawad Razaqzada.
“This will keep the dollar… in focus after a very strong US jobs report on Friday rekindled the possibility of a hat trick of 75-basis-point rate hikes in September.”
Data due Wednesday are expected to show inflation in the world’s biggest economy slowed slightly in July, but remained close to the four-decade highs seen in recent months.
The reading “seems very unlikely to offer compelling evidence of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode”, said SPI Asset Management analyst Stephen Innes.— AFP
