Key points:
- Dollar index steady to start week.
- Markets digesting wild trading.
- Inflation data to spark volatility.
Dollar nearly dug out of deep hole last week, erasing 1% loss to snap back above 103. Inflation data looms Wednesday — brace yourselves.
- The US dollar index
DXY was slow to perk up for trading in the new week after traders got exhausted from wild swings over the past five trading days. The index, measuring the greenback’s strength against six major currencies, floated pretty much unchanged in its Monday morning deals at around 103 to 103.20. Later in the week, currency speculators will get a new rush of adrenaline with the latest on inflation. - The US dollar swung sharply last week, dropping near its 2024 lows of 102.00 before determined bulls dug it out of its hole. The intense unwinding of the so-called “carry trade,” which saw a massive rotation out of US dollars and into Japanese yen, was among the biggest drivers of volatility not just in the buck or forex but in the broader financial market. With the recent dollar gains, the yen has pared some of its own advance.
- Consumer prices are next up to test your trading skills and rattle your portfolio. The CPI index, due Wednesday, will show whether consumer inflation eased in July. Big expectations for that figure — analysts are eyeballing the first dip under 3.0% year-over-year since April 2021 — the last month of relatively normal price growth before the aggressive surge of inflation swept the US economy and peaked at 9.1% in July 2022. Traders, brace yourselves for elevated volatility and start looking for trading opportunities.
