The US data schedule this week is relatively light, as it provides an opportunity to catch a breath after the strong jobs report on Friday, which pushed the dollar higher and changed the markets’ bets on the expected scope of the future cut in US interest rates.
Investors are awaiting Wednesday the minutes of the Federal Reserve’s September meeting, which will present discussions on what appeared at the time to be a deterioration in the labor market that ended with all but one policymakers agreeing to cut interest rates by 50 basis points.
But bets on another big cut in November are off the table after the latest non-farm payrolls data indicated the economy is becoming more resilient.
The CME Group’s Fed Watch tool showed that markets are now betting 85 percent on a 25 basis point cut in interest rates, in addition to a small possibility that the US Central Bank will leave interest rates unchanged.
The September Consumer Price Index report scheduled for Thursday will be the most important this week.
“US inflation data this week and upcoming corporate results will be important to support the recovery of the US dollar,” analysts at Westpac IQ wrote in a note.
The dollar index, which measures the performance of the US currency against a basket of major currencies, settled at 102.490 points, a level not far from the highest level in seven weeks that it recorded on Friday at 102.69 points, according to Reuters data.
The euro also stabilized at $1.0977. The British pound reached $1.3101, a price close to its lowest level in more than three weeks at $1.30595, which was recorded on Monday.
The dollar traded against the yen in a narrow range, hovering around 148.28 yen, after reaching a seven-week high of 149.10 on Monday.
The yuan settled in external trading at 7.0695 to the dollar.
The New Zealand dollar fell to its lowest level since August 19 at $0.6096, after the Reserve Bank of New Zealand cut interest rates by 50 basis points. The New Zealand dollar fell in recent trading by 0.55 percent to $0.61035.
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