Dollar Rebounds, Markets Await Fed's Next Move

The U.S. dollar recovered on Monday, while the yen lost safe-haven gains. Investors are focused on upcoming U.S. inflation data to gauge the Federal Reserve's rate cut decision. In China, consumer prices accelerated, increasing calls for stimulus. The yuan weakened, with global currencies fluctuating amid market uncertainties.

The U.S. dollar found some footing on Monday, while the yen retreated from its recent safe-haven surge. Investors remain uncertain about the scale of the Federal Reserve's anticipated rate cut, looking to this week's U.S. inflation data for guidance.

In China, consumer prices increased in August at the fastest pace in six months, although producer price deflation worsened, prompting renewed calls for stimulus measures. The yuan weakened, with its onshore counterpart down 0.3% and the offshore counterpart easing 0.27%.

Meanwhile, global currencies struggled to find clear direction following lackluster U.S. jobs data. Although employment growth was slower than expected in August, a lower jobless rate and solid wage growth suggest a cooling U.S. labor market. This has created mixed signals regarding the Fed's decision on whether to implement a 25 or 50 basis point rate cut at its upcoming policy meeting.

(With inputs from agencies.)