The dollar index eased to around 113 on Monday after gaining nearly 1% in the previous session, as traders reassessed the outlook for inflation and interest rates in the US. The greenback jumped on Friday after a University of Michigan survey showed US year-ahead inflation expectations increased for the first time in seven months, fueling concerns about unsustainable price growth after September’s CPI print came in hotter than expected. That has also prompted Federal Reserve officials to signal readiness to raise interest rates higher than previously planned, with St. Louis Fed President James Bullard signaling openness to hike rates by 75 basis points at each of the next two meetings in November and December. Meanwhile, the dollar weakened against the sterling on Monday on expectations that the UK may reverse more of its unfunded tax cuts, while holding steady against the yen as sharp currency moves raised speculations about another intervention from Japanese authorities.
