Market News
Dollar retreats from post-jobs spike as traders brace for U.S. CPI test - INVESTING.COM
BY Ayushman Ojha
Investing.com-- The dollar stabilized on Monday after jumping on stronger-than-expected U.S. employment data, while investors awaited U.S. inflation figures for clues on the Federal Reserve policy outlook.
The US Dollar Index edged down 0.2% to 102.1 by 06:49 GMT, after gaining 0.7% on Friday in its biggest one-day advance in five months.
The greenback had rallied after U.S. employers added 165,000 jobs in October, more than double economists' expectations, while the unemployment rate fell to 4.1% from 4.2%.
Markets are now pricing in nearly an 80% probability of a 25-basis-point Fed rate increase at its December meeting, up from around 71% a week earlier, according to CME FedWatch data.
Investors are awaiting U.S. consumer price figures on Tuesday, which could further strengthen expectations for tighter monetary policy.
Asian currencies eked out modest gains after sharp losses in the previous trading session.
China PPI inflation hits 4-year high, CPI cools
The Chinese yuan's onshore USD/CNY and offshore USD/CNH pairs traded largely flat.
Data on Monday showed China's factory-gate inflation accelerated to its fastest pace in more than four years in October, while consumer price growth slowed, highlighting the uneven recovery in the world's second-largest economy.
The producer price index rose 5.7% year on year, accelerating from September's 5.0% and beating expectations for a 5.3% increase. The consumer price index (CPI), however, rose 0.7%, easing from 0.9% in September and missing forecasts for 0.8%.
Higher global energy costs and demand for AI-related electronics drove producer inflation, while falling food prices and subdued domestic demand continued to weigh on consumer prices.
Capital Economics analysts said they expected the external price shock to persist over coming months but fade next year, with producer prices returning to deflation and consumer inflation averaging just 0.4% in 2027.
