The dollar index steadied around 103.1 on Monday as investors look ahead to key inflation data this week for confirmation that price growth has continued to stabilize.
US producer inflation data will be released on Tuesday and consumer inflation figures will follow on Wednesday. US retail sales numbers are also slated for Thursday. Last week, the dollar tumbled to a seven-month low as a weak July jobs report stoked US recession fears, with markets speculating on an emergency cut from the Federal Reserve.
The yen's rally fueled by government interventions and Bank of Japan rate hikes also exacerbated the dollar's decline. However, sentiment has since stabilized as succeeding US economic data alleviated fears of a downturn, causing the dollar to recover most of the losses from last week.
Markets also dialed back bets for Fed rate cuts, although expectations for over 100 basis points of total easing this year remained intact.
Source: TradingEconomics
