By Peter Nurse
Investing.com -- The dollar traded higher Monday, with traders starting to focus on the upcoming U.S. inflation numbers as the debate surrounding the timing of the start of the Federal Reserve’s tapering continues.
At 2:55 AM ET (0755 GMT), the Dollar Index , which tracks the greenback against a basket of six other currencies, rose 0.2% to 92.778.
The dollar has posted its first winning week in three on Friday, and this positive tone has continued at the start of this week, as a number of members of the Federal Reserve continued to point to a reasonably prompt tapering of its bond-buying program despite the rising numbers of Covid-19 cases and the disappointing recent nonfarm payrolls release.
Philadelphia Fed President Patrick Harker continued the theme Monday, in a Nikkei interview, indicating that he was keen to begin scaling back asset purchases.
"I'd like to start the taper process soon, so that we can finish the tapering process, so if we need to increase the policy rate, we have the room to do that. And I think we need to buy ourselves that option," Harker told the Nikkei.
This puts the Fed’s get together later in September firmly in focus. Tuesday’s U.S. consumer price data , along with retail sales and production figures later in the week, will be studied carefully in the lead-up to the central bank meeting .
“We suspect that the dollar will trend higher in the run-up to the FOMC meeting, where a clear signal of the Fed's tapering intentions is expected,” said Marc Chandler, Chief Market Strategist at Bannockburn Global Forex, in a note. “The seven Fed officials who in June thought a hike may be appropriate next year may have persuaded a colleague or two.”
USD/CNY rose 0.2% to 6.4542, with the yuan struggling, in line with the country’s stock markets, following a further regulatory clampdown on the important tech sector.
Finally, USD/RUB dropped 0.1% to 73.139, after the Bank of Russia delivered a smaller-than-expected increase in its key interest rate on Friday, hiking by 25 basis points to 6.75%, while leaving the door open to further tightening after inflation hit a five-year high last month.
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