Dollar on the Rise Amid U.S.-China Tariff Deal Deadline and Inflation Report

The U.S. dollar strengthened ahead of the deadline for a U.S.-China tariff deal and a key inflation report that could influence Federal Reserve interest rate decisions. A modest hawkish repricing of Fed expectations bolstered the dollar. Trade talks and personnel moves at the Fed also affected markets.

The U.S. dollar advanced modestly on Monday, just as financial markets brace for the outcome of a critical U.S.-China tariff agreement and the release of a U.S. inflation report. Both events could significantly impact Federal Reserve's interest rate policies, traders say.

Market analyst Michael Brown notes a subtle pro-dollar momentum driven by participants adjusting positions ahead of the potential market-moving CPI data. Economists expect a consistent rise in core inflation, potentially influencing imminent Fed rate cut decisions amid labor market concerns.

In the backdrop of these developments, trade negotiations between the U.S. and China remain pivotal. The impending deadline for an agreement on chip policies, crucial for technology giants like Nvidia and AMD, continues to capture market attention.

(With inputs from agencies.)