Dollar Weakens Further Amid Softer US Data
The US Dollar started the week on a weaker footing after posting losses against major rivals in the previous week. Despite softer-than-expected producer inflation figures on Thursday, data from the US showed that Retail Sales contracted by 0.6% monthly in Friday, missing market expectations for an increase of 0.1%. The University of Michigan's Consumer Sentiment Index dropped to 51 in August's flash estimate from 55.2 in July.
The USD Index continues to stretch lower after closing in negative territory on Friday and is last seen losing 0.2% on the day at 99.43. Analysts at BNY note that 'softer US data over the last few weeks have reduced rate hike expectations for the rest of 2026,' with markets increasingly questioning the likelihood of any renewed tightening cycle.
Crude Oil prices remain relatively quiet in the European morning, with the barrel of West Texas Intermediate (WTI) trading marginally lower on the day at around $81. The Canadian Dollar is under modest bearish pressure on Monday and trades at its lowest level since early June near 1.3860.