Dollar holds near 18-month high ahead of US inflation data

The US dollar has been hovering near an 18-month high as markets eagerly anticipate US inflation data and keep a watchful eye on geopolitical tensions. On Monday, the dollar remained steady near its highest level in 18 months, with investors maintaining a cautious stance due to the escalating tensions in the Middle East and the expectation of crucial US inflation data due this week.

The Federal Reserve's upcoming meeting, set for late October, will likely hinge on the outcome of this data, which could steer the central bank's monetary policy direction.

The dollar index, which gauges the greenback against a basket of six major currencies, dipped marginally to 102.16 points. It also weakened by 0.06% against the Japanese yen, reaching 158.245 yen. Trading was relatively subdued, partly attributed to a Japanese market holiday.

Conversely, the euro climbed by 0.1% to $1.121, and the British pound followed suit by the same margin, reaching $1.3245. The Australian dollar maintained its steady level at $0.69815, while the New Zealand dollar held firm at $0.56080. In Asian markets, the Indian rupee surged by 1% to 95.8 against the dollar, while the South Korean won expanded by 0.5% to 1,334 per dollar.

The anticipation surrounding the US consumer price index release on Wednesday adds to the market's uncertainty. This data, followed by the Federal Reserve's meeting scheduled for late October, is expected to provide clarity on the future path of interest rates.