• The dollar found some traction on Monday following last week’s steep fall and managed to hold above a three-year low against a basket of currencies.
The dollar index against a group of six major peers .DXY was mostly steady at 89.045 after enjoying a modest bounce on Friday following its descent to 88.253, its lowest since December 2014.
The dollar was little changed at 106.330 yen JPY= after sliding on Friday to 105.545, lowest since November 2016.
The euro was nearly flat at $1.2423 EUR=. The common currency surged to a three-year high of $1.2556 on Friday before slipping to post a loss of 0.7 percent.
For the March meeting, the market is pricing over 80% chances for a 25 basis points rate hike taking the interest rate to 1.50-1.75%; for May meeting it is 79.7% chances.
• J.P. Morgan slashed expectations for U.S. economic growth in the first quarter thanks to Wednesday's "hotter than Hades" inflation reading and "ugly" retail sales numbers.
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• New home construction increased to more than a one-year high in January, boosted by a rebound in the building of single-family housing units, and further gains are likely as building permits soared to their highest level since 2007.
Housing starts jumped 9.7 percent to a seasonally adjusted annual rate of 1.326 million units, the Commerce Department said on Friday. That was the highest level since October 2016 and followed an upwardly revised sales pace of 1.209million units.
Economists polled by Reuters had forecast housing starts rising to a pace of 1.234 million units last month after a previously reported rate of 1.192 million units.
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• U.S. factory output was flat for the second straight month in January, raising questions about the manufacturing outlook as production dropped in the aerospace, plastics and food industries.
• U.S. import prices rose more than expected in January as the cost of imported petroleum and a range of other goods increased, which could boost inflation in the coming months.
The Labor Department said on Friday that import prices jumped 1.0 percent last month after an upwardly revised 0.2 percent rise in December. Economists polled by Reuters had forecast import prices increasing 0.6 percent in January after a previously reported 0.1 percent gain in December.
Data this week showed an acceleration in consumer and producer prices in January. The increases have bolstered expectations that inflation will rise this year and potentially breach the Federal Reserve's 2 percent target.
Inflation is expected to be driven by a tightening labor market, a weak dollar and fiscal stimulus in the form of a $1.5 trillion tax cut package and increased government spending.
Higher inflation could prompt the Fed to be a bit more aggressive in raising interest rates this year than is currently anticipated. The U.S. central bank has forecast three rate increases for this year, with the first hike expected in March.
• Oil prices extended gains to hit their highest level in nearly two weeks on Monday, buoyed as Asian shares joined a global recovery in equity markets and as worries grew over tensions in the Middle East.
U.S. West Texas Intermediate crude for March delivery CLc1 was up 73 cents, or 1.2 percent, at $62.41 a barrel by 0600 GMT, after earlier touching its highest since Feb. 7.
London Brent crude LCOc1 was up 52 cents, or 0.8 percent, at $65.36, after rising more than 3 percent last week.
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