The U.S. dollar pulled back from a one-week high on Monday, giving up part of its rally after Friday's jobs report. The euro gained as traders waited for Tuesday's U.S. inflation reading and a run of central bank speeches.
The U.S. dollar retreated from a one-week high on Monday, surrendering a portion of its post-jobs report rally. Traders are now looking ahead to the U.S. Consumer Price Index release and a heavy slate of central bank speeches.
Dollar index cools after its biggest gain since September
The U.S. Dollar Index slipped 0.4% to 101.88. On Friday it logged its largest single-session advance since September, after a strong U.S. non-farm payrolls report pushed investors to pull forward expectations for tighter monetary policy.
The euro climbed 0.4% to $1.118 as the greenback softened. However, the source says the single currency's upside stays tied to a cautious mood in Europe.
Eurozone traders are waiting on third-quarter regional GDP figures, updated European Central Bank economic forecasts and speeches from ECB policymakers. Meanwhile, the Japanese yen advanced 0.3% against the dollar after Friday's jump in U.S. Treasury yields.
Tuesday's CPI test follows bets on a December Fed hike
The U.S. Consumer Price Index arrives on Tuesday, as investors solidify bets that the Federal Reserve will raise interest rates in December. The Fed held borrowing costs steady last month after a rate hike in September, its first such increase in three years.
A hotter-than-expected CPI print would likely cement the case for a December hike, according to Investing.com. That could bring a fresh wave of dollar buying.
Before the data, FOMC member Michelle Bowman and Chicago Fed President Austan Goolsbee are due to speak on Monday. The Treasury will also auction three-year notes, after the previous auction yielded 4.932%.
Source: Investing.com
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