Dollar firm ahead of US inflation data; yen hovers near one-year low
inflation data from the United States that is expected to offer further clues this week on whether the Federal Reserve has more work to do to tame price pressures.
The Japanese yen remained vulnerable, hovering not far from a one-year low against the greenback as markets remained on watch for possible intervention by Tokyo.
The focus for most traders will be firmly on U.S. consumer price index (CPI) numbers due on Tuesday after the Fed's policy meeting this month tempered its hawkish stance although Fed Chair Jerome Powell last week hinted that the battle against inflation may not be over yet.
Retail sales the following day will also provide more information on the state of demand in the U.S. economy, which has shown signs of resilience in the face of high borrowing cost.
«We expect the USD to remain on a strong footing,» Lenny Jin, Global FX Strategist at HSBC, wrote in a note, citing the U.S. economy's continued growth outperformance as one crucial factor.
HSBC expects November U.S.
core CPI to remain unchanged compared to last month, «while further disinflation signals may only come in February 2024,» said Jin.
Elsewhere, market reaction was muted to news announced shortly before foreign exchange trading closed in New York on Friday that Moody's lowered its outlook for the U.S. credit rating to «negative».
The dollar index, which measures the dollar against a basket of currencies, was last mostly flat at 105.80.
There was little relief for the yen, however, which has come under pressure from rising U.S.
