Dollar Gains Amid Weakening Yen Ahead of Inflation Data
The US dollar strengthened on Monday as investors awaited the release of consumer price inflation data for July. The upcoming report is expected to provide insight into whether inflationary pressures are reaccelerating, which could influence expectations around a near-term Federal Reserve rate hike.
Recent jobs data was weaker than anticipated, casting doubt on the likelihood of a rate increase. Analysts say slowing job growth and easing oil prices have contributed to lower odds of a near-term hike, with Fed funds futures traders now pricing in 48% odds of a hike at the September meeting, down from 55% previously.
The Japanese yen weakened against the greenback, dropping 0.75% to 158.97 per dollar, its steepest daily decline in nearly five months. Speculators slashed their bearish bets on the yen by the most in over 12 years, reflecting coordinated efforts to strengthen the currency.