Dollar slips before inflation report, US-China tariff deadline
The dollar index fell 0.2% to 98.073 after last week's fall of 0.4%. Against the yen, it traded at 147.46 , or 0.20% weaker than late U.S. levels, with Japanese markets closed for the Mountain Day holiday.
"If I'd be playing it any way, I'd be long volatility this week," said Tim Kelleher, head of institutional FX Sales at Commonwealth Bank in Auckland, citing the unpredictability of the looming events.
Crypto markets surged, with bitcoin rising 3% to $121,909.06, not far from its July 14 record of $123,153.22, after President Donald Trump's executive order on Thursday freed up cryptocurrency holdings in U.S. retirement accounts.
Ether was up 2.1% at $4,307.25, after touching its highest since December 2021 earlier in the session.
Trade talks were also in focus as Trump's August 12 deadline for a deal between the U.S. and China neared, particularly on chip policy.
"The market has fully priced in the idea that we're going to get an extension," said Chris Weston, head of research at Pepperstone Group Ltd in Melbourne, adding that another 90-day truce was most likely.
With the U.S. and China seeking to close a deal averting triple-digit goods tariffs, a U.S. official told Reuters that chip makers Nvidia (NVDA.O), opens new tab and AMD (AMD.O), opens new tab agreed to allocate 15% of China sales revenues to the U.S. government, aiming to secure export licences for semiconductors.
"I don't know if that's going to be a good thing or a bad thing, but if it puts closure on the matter, it's not a bad outcome," Weston said.
"If this is Trump says 15% and we'll call it a day, that may not be too bad."
The report followed a warning that Nvidia's H20 chips pose security concerns for China, a social media account linked to state media said on Sunday.
The offshore yuan fluctuated between gains and losses, trading at 7.184 to the dollar, after weekend data showed China's producer prices fell more than expected in July, while consumer prices were unchanged.
The Australian dollar fetched $0.6526 , trading flat ahead of a rate decision by the central bank on Tuesday, in which it is widely expected to cut interest rates by 25 basis points to 3.60%, after second-quarter inflation missed expectations and the jobless rate hit a 3-1/2-year high.
The kiwi was little changed at $0.59545 , while the British pound traded at $1.3465, up 0.1% so far on the day.
Elsewhere, personnel moves at key U.S. monetary policy institutions were also in focus.
U.S. Treasury Secretary Scott Bessent said the new Federal Reserve chair should be someone "who can examine the whole organisation" as the Fed's mission covered many things outside of monetary policy and put its independence at risk, Japan's Nikkei newspaper said.
Among candidates the Trump administration is interviewing to lead the Bureau of Labor Statistics is E.J. Antoni, chief economist at the conservative Heritage Foundation, the Wall Street Journal said, citing a senior administration official.
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