The dollar index remained below 107 on Monday, hovering at its lowest level in over two months, as weak US economic data increased expectations of further Federal Reserve interest rate cuts. On Friday, data showed that US retail sales fell 0.9% in January, significantly worse than the anticipated 0.1% decline, with consumer spending likely impacted by severe weather and wildfires in California. While both CPI and PPI came in above forecasts, the PPI components feeding into the Fed's preferred inflation gauge, the PCE index, showed signs of cooling. The dollar also weakened as President Donald Trump delayed the implementation of reciprocal tariffs, easing some trade tensions. Additionally, Treasury Secretary Scott Bessent stated that the Trump administration is expanding its focus beyond tariffs and non-tariff barriers, now examining currency manipulation as part of its broader trade strategy.

Source: Trading economi