USA: Dollar Edges Higher as Inflation and US-China Trade Deal Take Center Stage.

The dollar index edged up slightly to 98.4 on Monday, recovering from last Friday’s lows as traders prepared for key inflation data due tomorrow. July inflation is expected to rise 0.2%, just below June’s 0.3%, while the annual rate is likely to have accelerated for a third consecutive month to 2.8%. Core CPI is also forecast to quicken to 0.3%. Despite persistent inflation, markets assign an 88% probability to a 25bps Fed rate cut next month, with another easing fully priced in by year-end. Traders are also awaiting developments in US-China trade talks, with most expecting another 90-day extension to allow further negotiations. Meanwhile, attention turns to Friday’s meeting between Presidents Trump and Putin, aimed at finding a resolution to the conflict in Ukraine. Finally, a series of economic releases. - including PPI, retail sales, and industrial production - will be closely watched, alongside any Fed board changes or political pressures from the US administration.