• The dollar carved out a 10-month trough on Monday as the diminished risk of aggressive U.S. policy tightening sent investors piling into leveraged positions in higher yielding currencies or risky assets.
Charts were crowded with milestones with the euro near ground last trod in May 2016 and sterling at its highest since September. The pound's 1.2 percent jump on Friday was the largest in three months and left it at $1.3107 GBP=.
The EUR= was hovering at $1.1471 and just short of major resistance at $1.1489. The U.S. dollar index .DXY was at its lowest since September at 95.089, while the greenback bought 112.49 yen JPY= having shed a big figure on Friday.
• Data showed consumer prices were unchanged in June and retail sales fell for a second straight month, pointing to tame inflation and subdued expectations of strong economic growth in the second quarter.
• Chances of a rate hike in December fell to 48 percent after the release of data, from 55 percent late Thursday.
Earlier this week, the market rose after Federal Reserve Chair Janet Yellen said future rate hikes could be gradual in the face of persistently low inflation.
• Dallas Federal Reserve Bank President Robert Kaplan said on Friday that the U.S. central bank could begin to allow its $4.5 trillion balance sheet to shrink "as soon as September," but that on interest rate hikes, he wants to be patient.
Speaking with reporters in Mexico City after a speech here, Kaplan said he is hopeful that winding down the balance sheet in a gradual and predictable way will reduce swings in financial markets.
At the same time, Kaplan reiterated his view that while the U.S. is near full employment, inflation has been muted, and he would like to see more progress before raising U.S. interest rates further.
• The U.S. Senate will delay its consideration of healthcare legislation while Arizona Republican Senator John McCain recuperates from surgery, Senate Republican leader Mitch McConnell said on Saturday.
McCain's absence cast doubt on whether the Senate would be able to pass the legislation to dismantle and replace Obamacare. McConnell needs 50 "yes" votes for passage in a chamber the Republicans control by a 52-48 margin.
• Eight to 10 Republican U.S. senators have serious concerns about Republican healthcare legislation to dismantle and replace Obamacare, moderate Republican Senator Susan Collins, who opposes the bill, said on Sunday.
• The budget deficit for President Donald Trump's first two years in office will be nearly $250 billion higher than initially estimated due to a shortfall in tax collections and a mistake in projecting military healthcare costs, budget chief Mick Mulvaney reported on Friday.
• China is expected to report on Monday that its economy grew 6.8 percent in April-June from a year earlier, cooling from the previous quarter's robust 6.9 percent pace as policymakers seek to rein in property and debt risks.
Beijing is trying to defuse property bubbles and curb a debt build-up amid fears such risks could derail the world's second-largest economy if not handled well, but policymakers look to be treading warily ahead of a key party meeting later this year.
• Oil rose 1 percent on Friday, boosted as U.S. crude producers added only two rigs in the latest week and on signs of increased Chinese demand, but trading was volatile as global supply remained strong.
Brent crude futures LCOc1, the international benchmark for oil, settled up 49 cents, or about 1 percent, at $48.91 per barrel. And U.S. West Texas Intermediate (WTI) crude futures CLc1 settled up 46 cents, or 1 percent, at $46.54 per barrel.
U.S. crude rose more than 5.2 percent for the week while Brent rose more than 4.7 percent.
Reference: Reuters
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