Starting trading at a weak opening of the week, the US dollar rebounded against the trend yesterday Tuesday.
On Monday, the US dollar continued its depreciation pattern that brought momentum from last Friday when the US (US) NFP employment report for August came with worrying readings.
However, the US dollar significantly strengthened in the New York session yesterday as investors are still cautiously awaiting new clues in the release of the US inflation report this week.
With the producer price index (PPI) data to be published in the New York session tonight, market analysts see the strengthening situation of the US dollar as a situation in which investors may take profits on their previous short positions in the currency.
This is because the market still places high expectations for the first interest rate cut to be implemented by the Federal Reserve (Fed) at the September FOMC meeting, next week.
There are even expectations for aggressive cuts of up to 50 basis points, but a higher percentage is a cut of 25 basis points in the continuation of the central bank's monetary policy easing measures.
In other developments, President Donald Trump announced that negotiations with India are still ongoing in an effort to resolve the trade between the two countries.
Meanwhile, Trump also urged the European Union (EU) to impose 100% tariffs on China and India, to put pressure on Russia.
This development, which also added to global pressure, provided some support for the US dollar to show a temporary recovery.
Further developments will be scrutinized by investors in assessing changes in current market sentiment which will also affect currency movements.
