Dollar Index Struggles Near Seven-Month Low Amid Inflation Concerns

The US dollar index (DXY) is struggling near its seven-month low as the yen continues to surge. This comes after Treasury Secretary Scott Bessent warned traders against betting on further weakness in the Japanese currency.

Rising oil prices are intensifying inflation concerns and strengthening expectations for a Federal Reserve rate hike, according to market analysts.

The better-than-expected US Nonfarm Payrolls (NFP) report has also revived bets for a September interest rate hike by the Fed amid inflation risks stemming from persistently higher energy prices.

Investors are awaiting key US inflation data this week, which could provide further clues on the Federal Reserve's policy outlook ahead of its next meeting.