© Reuters
Investing.com – The US dollar rallied in early European trading hours on Monday, recouping some of the sharp losses it took on Friday after a weak payroll release, while disappointing Chinese inflation data weighed on the yuan.
At 03:10 EST (07:10 GMT), the US dollar, which measures the greenback against a basket of six other currencies, was trading up 0.1% at 102.020, after falling nearly 1% on Friday.
Weak payrolls have weighed on the dollar; CPI scheduled for Wednesday
The dollar fell on Friday after the monthly employment report showed job gains in the United States were the smallest in two and a half years, raising doubts about how much of a hike the Federal Reserve will need to take interest rates to slow the economy. enough to influence inflation.
An increase of 209,000 in June, missing market expectations for the first time in 15 months.
However, the dollar rebounded somewhat on Monday, as traders re-evaluated the data, noting that the employment report continues to report strong wage growth, which is a big factor driving inflation.
Attention will now turn to Wednesday’s June release, which is expected to show the index rising at the slowest annual increase since March 2021.
“The big risky event for the dollar this week is Wednesday’s June inflation report,” analysts at ING said in a note. “Our economist expects a core reading of 0.3% per month, which should continue to provide encouraging news on the anti-inflationary story – but still falls short of adjusting the Fed’s narrative or persuading markets to lower July’s rally.”
In addition, several Fed officials are scheduled to speak during the week, including the president of the Minneapolis Federal Reserve, the president of the Cleveland Federal Reserve, the president of the San Francisco Fed, and the Fed governor.
China’s inflation figures are disappointing
It rose 0.2% to 7.2354, with the yuan weakening to levels last seen late last year after data released earlier showed China contracted at the fastest pace in seven-and-a-half years in June and fell 0.2% for the month.
The data adds to evidence that the world’s second-largest economy is struggling to recover from the COVID infection, fueling hopes for more support measures from the Chinese authorities.
Elsewhere, it fell 0.1% to 1.0962, it fell 0.1% to 1.2820, after jumping to its highest level in more than a year at 1.2850 on Friday, it rose 0.3% to 142.47, after falling nearly 1.3% late last week, while Often seen as a proxy for the Chinese currency, it fell 0.5% to 0.6655.