Dollar Holds Steady Ahead of CPI; Euro Awaits Ukraine Negotiations

The U.S. dollar traded mostly steady on Monday, as investors adopted a cautious stance ahead of several key events this week — notably the July U.S. CPI release, the meeting between U.S. President Donald Trump and Russian President Vladimir Putin, and the approaching deadline for a U.S.–China tariff agreement.

At 04:05 ET (08:05 GMT), the Dollar Index, which tracks the greenback against a basket of six major currencies, inched up to 98.050, stabilizing after last week’s sharp declines.

July CPI in focus

The dollar has remained under pressure since the release of a weaker-than-expected payrolls report earlier this month, which has heightened expectations for a Federal Reserve rate cut in September.

Markets are now pricing in more than a 90% probability of such a move.
Attention is firmly on Tuesday’s July consumer price index data, as analysts and policymakers have warned that U.S. tariffs could fuel inflationary pressures.

“Consensus is expecting another acceleration in core CPI, to 0.3% month-on-month (3.0% year-on-year), in this week’s July print,” ING analysts noted. “That level could still justify a September cut by the Fed, given the context of a weaker labor market.”

Trade negotiations are also in the spotlight, with the August 12 deadline for a U.S.–China deal approaching. Both parties are seeking to avoid the imposition of additional triple-digit tariffs on goods.

Euro supported by Ukraine peace hopes

In Europe, EUR/USD rose 0.1% to 1.1651, buoyed by optimism that the upcoming Trump–Putin talks could lay the groundwork for a truce in the Ukraine conflict.

“The significant uncertainty around the outcome, along with reduced G10 FX sensitivity to the Ukraine situation, limits the scope for substantial changes to our EUR outlook for now,” ING stated.

Meanwhile, GBP/USD was little changed at 1.3451, ahead of Tuesday’s key monthly labor market data.

A survey by the Chartered Institute of Personnel and Development revealed that only 57% of U.K. private-sector firms intend to hire over the next three months — the lowest reading since early 2021 and down slightly from 58% in the previous quarter.

Yuan steady ahead of trade deadline

USD/CNY edged down to 7.1830 after weekend data showed inflationary weakness persisted in July. Consumer prices were flat, while producer prices declined more than expected, underscoring the limited impact of recent Chinese stimulus efforts.

U.S.–China trade relations remain a focal point as the August 12 deadline for a permanent truce nears. Earlier this year, both sides had agreed to reduce tariffs temporarily, with discussions continuing toward a lasting agreement. President Trump has suggested he may extend the deadline as talks progress.

Elsewhere, USD/JPY slipped 0.1% to 147.63 in subdued trade with Japanese markets closed for a holiday, while AUD/USD eased 0.1% to 0.6519 ahead of Tuesday’s Reserve Bank of Australia policy meeting, where a rate cut is widely expected following last month’s unexpected pause.