The index reverses three consecutive daily pullbacks.
The probability of a Fed’s rate hike loses traction.
Investors’ attention is expected to be on the US CPI.
The greenback reverses three daily drops in a row and regains the 106.30 region when tracked by the USD Index (DXY) at the beginning of the week.
USD looks at risk trends, inflation
The index leaves behind part of last week’s corrective decline and manages to pick up some buying interest on Monday.
In the meantime, the underlying bullish trend in the greenback remains well propped up by the equally robust march north in US yields across different time frames, which in turn looks underpinned by the persistent tighter-for-longer narrative around the Federal Reserve.
It is worth noting that the US bonds market will be closed on Monday due to the Columbus Day holiday.
On another front, the USD net longs climbed to levels last seen in mid-December 2022 during the week ended on October 3, according to the CFTC Positioning Report. During that period, the index rose to fresh 2023 tops past the 107.00 hurdle, always bolstered by speculation that the Fed might extend its restrictive stance for longer than anticipated
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