Dollar Momentum May Slow Down Amid Data Releases
The US dollar's recent strong momentum may be short-lived as data takes center stage this week. With key releases including the August CPI report on October 14 and Friday's jobs figures, markets will closely watch for signs of US economic strength to solidify expectations of a 28 October rate hike.
Pricing is currently at 16bp, with a peak of 19bp last week. The dollar may not keep up with its recent gains if the data does not meet expectations, and news of the US and Iran working on a deal regarding the Strait of Hormuz could stabilize bonds and risk sentiment.
The eurozone's inflation data for September will be closely watched, with headline CPI expected to accelerate due to energy prices. However, core inflation is expected to remain subdued, and policymakers may not be swayed to take a more dovish stance.