Dollar Holds Steady Amid U.S. Inflation and Rate Cut Projections

The dollar remained stable after U.S. inflation data showed modest increases, affecting rate cut expectations. Investor sentiment improved after a U.S. government shutdown was averted. The yen remains weak against the dollar, sparking intervention talk. Global currencies face mixed reactions to U.S. inflation and monetary policies.

The dollar stood steady on Monday as U.S. inflation data showed only modest rises last month, alleviating concerns about rapid U.S. rate cuts next year, while the yen hovered near 156 per dollar, raising possible intervention.

Investor sentiment received a boost after Congress passed spending legislation, averting a U.S. government shutdown early Saturday. With a holiday-shortened week, trading volumes are predicted to dwindle as the year approaches its end.

The Federal Reserve's recent projection of a moderated pace of rate cuts sent Treasury yields and the dollar climbing, casting a shadow over other economies, particularly emerging markets. The Fed's favored inflation gauge on Friday showed moderate monthly price rises, with core inflation excluding food and energy remaining well above the 2% target.

(With inputs from agencies.)