The dollar index edged above 106 on Monday, rising further from recent lows as a growing unrest in China over its strict Covid restrictions dented risk sentiment and spurred haven demand for the currency. Investors also continued to assess the outlook for growth and monetary policy after the latest Federal Reserve meeting minutes showed that a substantial majority of policymakers agreed it would soon be appropriate to slow the pace of interest rate hikes, while flagging increased recessionary risks.
Earlier this month, the Fed delivered its fourth straight 75 basis point rate increase and pushed borrowing costs to the highest since 2008 to tame stubbornly high inflation, and markets are now betting that it would moderate the size of its rate hike in December to 50 basis points. Investors also look ahead to a slew of US economic releases this week such as the labor report, personal consumption data and ISM manufacturing figures, among others.
