FX.co ★ Dollar Holds Steady Amid Easing Trade Tensions

The dollar index remained stable around 98.5 on Monday, maintaining its gains from the previous session. This stability comes amidst a backdrop of easing trade tensions between the US and China, with President Donald Trump indicating that his suggested retaliatory tariffs on China are not sustainable. This week, Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are scheduled to meet in an attempt to alleviate these tensions before a potential meeting between Trump and Xi Jinping later this month. Investors are also focused on the forthcoming September Consumer Price Index (CPI) report, which is anticipated to indicate that inflation remains high. This report is under scrutiny by traders, especially given the ongoing data blackout caused by the government shutdown. On the monetary policy front, the Federal Reserve is widely expected to reduce interest rates by 25 basis points next week, with projections for another cut in December and possibly three more next year. This comes as policymakers balance the weakening labor market conditions against persistent inflationary pressures.