Dollar holds near two-month low as markets await US inflation data

The US dollar has dropped to a near two-month low against key currencies as investors eagerly await crucial US inflation data this week. This week, the dollar held relatively steady on Monday, hovering near a two-month low against major currencies while investors anticipated the release of US inflation data later, hoping to gain insight into the Federal Reserve's future interest rate decisions.

The dollar index was recorded at 99.6 points, whereas the euro appreciated to $1.1558 and the British pound maintained a level of $1.3490. The Japanese yen remained stable at 157.90 dollars. Market forecasts suggest that the likelihood of a September interest rate hike has decreased to approximately 44 percent, a significant drop from 67 percent a week prior.

This decline is attributed to recent data revealing an unexpected job loss in the US economy during July, along with downward revisions to job figures from the previous two months. Analysts are now focusing on upcoming US consumer and producer price data, as well as retail sales figures. Forecasts indicate a potential slowdown in core inflation, projecting it to reach 2.5 percent year-on-year in July.

In energy markets, Brent crude oil prices surged 1.4 percent, reaching around $85 per barrel, driven by ongoing uncertainty surrounding the reopening of the Strait of Hormuz.