Dollar Strengthens Slightly, Fed Remains Key
The US dollar index rose slightly at the start of the week, hovering around 101. Despite the strengthening, the dollar remains near a three-week low after posting its biggest weekly decline since April last week.
Pressure on the dollar emerged after the June US jobs report showed job growth slowed sharply. This data led investors to reduce expectations that the Federal Reserve would raise interest rates this year.
The drop in oil prices to pre-conflict levels also impacted market sentiment. The decline in energy prices helped ease concerns about renewed inflation, weakening the case for the Fed to raise interest rates aggressively.
Currently, the market is pricing in a 56% chance of a Fed rate hike in September. This figure is down from around 64% before the jobs data was released. Investors are now awaiting the minutes of this week's FOMC meeting for clearer clues regarding the direction of interest rate policy.
On Monday, the dollar recorded its strongest gain against the Japanese yen. The yen remains near its lowest level in 40 years, while the threat of intervention from Japanese authorities is keeping traders cautious about taking positions.
Source: Newsmaker.id
