The US Dollar found renewed support on Monday, buoyed by solid US economic growth, inflation remaining above target, and expectations for further Federal Reserve tightening, according to FX Street (ING). Chris Turner from ING highlighted that the DXY index remains bullish while consolidating above 102, with a preferred target of 102.85 this week amid ongoing geopolitical tensions.
Meanwhile, the Canadian Dollar struggled as diverging monetary policy expectations between the Federal Reserve and the Bank of Canada weighed on its performance. USD/CAD trimmed earlier losses as the US Dollar regained ground, reflecting uncertainty over the pace of policy tightening in Canada compared to the US.
Gold prices edged lower on Monday, reversing earlier gains as investors awaited the upcoming US inflation data scheduled for September. For Japanese markets, the firm US Dollar and cautious gold movement underscore the importance of closely monitoring US inflation metrics, which will influence global risk sentiment and currency flows.