Dollar Index Edges Higher Ahead of Inflation Data

The US Dollar Index (DXY) edged closer to the 100.00 psychological level on Monday, as investors awaited the release of US inflation data that could influence the Federal Reserve's next policy moves.

The index rose by 0.2% to 99.95 in early European trading, reflecting renewed demand for the dollar amid cautious market sentiment.

This uptick comes after a volatile week where the dollar touched a two-year low of 99.20 on expectations that the Fed might cut interest rates sooner than previously anticipated.

However, stronger-than-expected US retail sales figures last Friday provided some support, prompting traders to reassess the likelihood of an imminent easing cycle.