The dollar started in a cautious mood on Monday as markets braced for U.S. inflation data and a throng of Federal Reserve speakers this week, while the yuan nursed a hangover from Beijing’s latest underwhelming stimulus package.
Highlighting the weak background in China, data out over the weekend showed consumer prices rose at the slowest pace in four months in October while producer price deflation deepened, reports Reuters.
Reports on retail sales and industrial output due Friday should show whether Beijing’s various attempts at stimulus are having any real effect on demand.
Disappointment at the latest package had seen the Australian and New Zealand dollars slide on Friday as both countries are major exporters to China.
The dollar stood at 7.1970 yuan , having jumped 0.7% on Friday, and looks set to again test the 7.2000 barrier.
Moves were minor overall, with U.S. bond markets on holiday though stocks and futures are open. The dollar was up 0.1% on the yen at 152.90 , having been dragged off last week’s top of 154.70 by the risk of Japanese intervention.
The dollar index was a fraction firmer at 105.00, after gaining 0.6% last week mainly against the euro.The single currency was stuck at $1.0711 , having shed 1% last week to as low as $1.0683. Support now lies around $1.0667 and $1.0601.
Political uncertainty remained a drag as German Chancellor Olaf Scholz said he would be willing to call a vote of confidence before Christmas, paving the way for snap elections following the collapse of his governing coalition.
