Dollar dips as easing AI and Mideast worries limit its appeal
TLT•The dollar index fell 0.3% to 101.87 on Monday as market sentiment improved after Friday’s 0.8% rally, which followed strong U.S. jobs data. Traders are watching Tuesday’s U.S. inflation data, with futures implying an 81% chance of a Federal Reserve rate hike on December 9.
1. Dollar pulls back
The dollar eased on Monday after posting its biggest gain in nearly six months on Friday, when strong U.S. jobs data boosted bets on higher interest rates. The dollar index fell 0.3% to 101.87, while the euro rose 0.4% to $1.1188, sterling gained 0.5% to $1.3412 and the yen strengthened 0.3% to 157.91 per dollar.
2. Rate outlook in focus
Improved market sentiment followed a drop in Brent crude futures after Donald Trump downplayed the likelihood of renewed strikes on Iran. Investors are also weighing concerns about AI investment, profitability and regulation. Tuesday’s U.S. consumer price index is expected to rise 0.3% month on month, and futures imply around 81% odds of a Fed rate hike on December 9.
