Dollar Holds Moderate Gain, Markets Await US Inflation and Trade Deal
The US dollar exchange rate remained relatively stable on Monday (August 11th), ahead of the release of key inflation data and the deadline for a tariff agreement between the US and China. The dollar index fell slightly to 98.164, with similar movements against the yen (147.39), the euro (US$1.1652), and the pound sterling (US$1.3462). Market sentiment is currently influenced by growing expectations of a Federal Reserve interest rate cut after weak US jobs and manufacturing data showed weakness.
Investors are now awaiting the US core CPI data scheduled for release on Tuesday. Analysts at ING noted that a 0.3% monthly increase in core CPI would open the door for the Fed to cut interest rates. This is exacerbated by signals of a 90% interest rate cut swap for September, and the option of a cut of up to 58 basis points before the end of the year.
Meanwhile, US-China trade negotiations are also under scrutiny ahead of the August 12th deadline. The market is expecting a 90-day extension of the tariff truce, particularly regarding chip policy. In an interesting development, chipmakers like Nvidia and AMD have reportedly agreed to allocate 15% of their sales revenue in China to the US government in exchange for export permits. This raises hopes that negotiations may soon ease.
Source: Newsmaker.id
