USD Gains Amid Softening Rate Cut Bets: Focus on Jobs Data

Here’s this week’s overview of the US Dollar:

•  In the past week, the US Dollar Index strengthened 0.9% against a trade weighted basket of its peers.

• The dollar index held around 101.7 on Friday after rising for three straight sessions, as investors dialled back bets for aggressive Federal Reserve rate cuts in light of the latest inflation reading, while looking forward to a key US jobs report later this week.

• Data released on Friday showed that US core PCE prices grew at a steady rate in July, denting hopes that the central bank could deliver a jumbo 50 basis point rate cut in September.

• Focus now shifts to the upcoming August jobs report as the Fed's attention moves from inflation to the labour market.

•  A chorus of Fed policymakers recently warned about signs of a softening jobs market, while indicating confidence that inflation will return to target.