Dollar Holds Steady as Traders Await CPI, Trade, and Ukraine Talks
The U.S. dollar traded mostly unchanged on Monday, as investors awaited a busy week of market-moving events. Key highlights include the July CPI release, a meeting between U.S. President Donald Trump and Russian President Vladimir Putin, and the looming deadline for U.S.-China trade talks.
At 04:05 ET (08:05 GMT), the Dollar Index — which tracks the greenback against six major currencies — inched up to 98.050. This came after last week’s sharp losses.
CPI Data in Focus
The dollar has been under pressure since a weaker-than-expected payrolls report earlier this month boosted expectations of a Federal Reserve rate cut in September. Markets now price in over a 90% chance of a cut.
Attention turns to Tuesday’s July consumer price index data. Analysts expect core CPI to rise by 0.3% month-on-month (3.0% year-on-year). Economists note that Trump’s tariffs are likely to push inflation higher, giving the Fed more reason to cut rates.
Trade negotiations remain a key theme. Trump’s August 12 deadline for a U.S.-China deal is fast approaching. Both sides aim to prevent new tariffs on hundreds of goods. Over the weekend, the Financial Times reported that Nvidia (NASDAQ: NVDA) and AMD (NASDAQ: AMD) agreed to give the U.S. government 15% of their China chip sales revenue as part of the talks.
Euro Edges Up on Ukraine Peace Hopes
In Europe, EUR/USD rose 0.1% to 1.1651 on optimism that this week’s U.S.-Russia talks could lay the groundwork for a Ukraine truce. However, ING analysts noted that uncertainty over the outcome limits the case for significant euro gains.
The British pound traded flat at 1.3451, ahead of Tuesday’s U.K. employment report. A survey by the Chartered Institute of Personnel and Development showed hiring intentions at their weakest since the COVID-19 pandemic, with only 57% of private-sector employers planning to recruit in the next three months.
Yuan Softens as China Faces Weak Inflation
In Asia, USD/CNY dipped slightly to 7.1830 after weekend data showed China’s CPI flat in July and a sharper-than-expected fall in PPI. The figures signaled limited impact from Beijing’s recent stimulus.
The U.S. and China remain focused on trade discussions ahead of the August 12 truce deadline. Trump has suggested he may extend the talks to reach a more permanent deal.
The Japanese yen traded at 147.63 per dollar, down 0.1%, in thin trading with Tokyo markets closed for a public holiday. Meanwhile, AUD/USD slipped 0.1% to 0.6519 ahead of Tuesday’s Reserve Bank of Australia meeting, where a rate cut is widely expected after July’s surprise hold.
