USD remains hovering at 7-week highs
Investors are digesting the strong NFP jobs report
The situation in the Middle East continues to favor the USD
Although seen as still trying to maintain momentum after last week's NFP, the US dollar showed a relatively flat movement at the opening of the early week yesterday.
Analysts have predicted the situation following the absence of focus economic data yesterday and today (Tuesday).
The market is still in the mode of digesting the United States (US) NFP employment report published last Friday where the figures for employment growth, average wages and the unemployment rate in August all showed strong readings.
Thus, no change is expected for the movement of the US dollar currency which has displayed a strong performance to record its best weekly trade in the past 2 years.
Looking back on Tuesday last week, tensions flared in the Middle East after Iran launched a missile attack on Israel.
Following the risk-off market sentiment has supported the recovery of the US dollar as a safe-haven currency that previously experienced pressure after the Federal Reserve (Fed) lowered interest rates by 50 basis points.
This week, observers will be keenly looking towards the US inflation report which will be the Fed's next guide in setting their monetary policy.
Consumer inflation (CPI) will be published on Thursday while producer inflation (PPI) will be published on Friday.
Based on the CME FedWatch indicator, there is no longer an expectation for a cut of 50 basis points by the Fed, instead a high percentage is for a cut of 25 basis points.
