Dollar Rebounds as Investors Await Key U.S. Inflation Data

The dollar rebounded against major currencies on Monday, following last week's losses. Investors are anticipating key U.S. inflation data and have reduced expectations for a significant Federal Reserve interest rate cut. The dollar saw gains versus the yen and euro, amid mixed sentiments on future rate cuts and economic data.

The dollar rebounded on Monday against major currencies, recovering from last week's losses, as investors shifted focus to upcoming U.S. inflation data.

The greenback gained 0.4% against the yen and rose for a second consecutive day versus the euro. Market expectations now lean towards a 25-basis-point rate cut at the Federal Reserve's meeting next week, down from Friday's anticipation of a larger cut.

Amo Sahota of Klarity FX suggests the possibility of a significant rate cut in November, depending on inflation data. The dollar's recent strength comes despite a month of declines, with a 2.1% loss in September. Key attention is now on U.S. consumer price index data due Wednesday and further economic developments.

(With inputs from agencies.)