Dollar Reverses on Monday
The dollar Index fell nearly 0.4% to 101.8 on Monday, reversing some of Friday’s 0.7% rally, its largest daily gain in nearly six months. The greenback came under pressure amid declining oil prices, while the AI-driven market rotation lost momentum. Last week, a Democratic sweep of Congress last week prompted investors to price in the possibility of tighter regulation and potential constraints on AI-related capital expenditure. Meanwhile, markets are turning their attention to this week’s CPI and PPI releases, which are expected to signal an acceleration in both annual headline consumer and producer inflation. Against this backdrop, market-implied odds of another 25bps Fed rate hike next month currently stand at around 80%. The dollar weakened broadly, recording its steepest losses against the Australian dollar, euro and British pound.
The dollar Index fell nearly 0.4% to 101.8 on Monday, reversing some of Friday’s 0.7% rally, its largest daily gain in nearly six months. The greenback came under pressure amid declining oil prices, while the AI-driven market rotation lost momentum. Last week, a Democratic sweep of Congress last week prompted investors to price in the possibility of tighter regulation and potential constraints on AI-related capital expenditure. Meanwhile, markets are turning their attention to this week’s CPI and PPI releases, which are expected to signal an acceleration in both annual headline consumer and producer inflation.
Against this backdrop, market-implied odds of another 25bps Fed rate hike next month currently stand at around 80%. The dollar weakened broadly, recording its steepest losses against the Australian dollar, euro and British pound.