Dollar nudges lower as AI, Mideast worries ease
TLT•The U.S. dollar index fell 0.3% to 101.88 on Monday as AI-related jitters and concerns about renewed strikes on Iran eased. Markets priced in an 81% chance of a Federal Reserve rate hike on December 9 ahead of U.S. inflation data due Tuesday.
1. Dollar retreats
The U.S. dollar edged lower on Monday after its biggest one-day gain in nearly six months on Friday, when stronger-than-expected jobs data boosted bets on higher interest rates. The dollar index dipped 0.3% to 101.88, while improving market sentiment followed an easing of AI jitters and a 1.3% drop in Brent crude after President Donald Trump downplayed the likelihood of renewed strikes on Iran.
2. Rate outlook in focus
A Reuters poll expects U.S. consumer prices to rise 0.3% month over month in October. Futures implied an 81% chance of a Federal Reserve rate hike on December 9, up from a week earlier. ING strategist Francesco Pesole said inflation data could help cement expectations for a December hike, while warning that the dollar’s rally could face a moderate correction if risk aversion does not persist.
