Dollar Dips as Global Events Loom: Market Awaits Key Decisions

The U.S. dollar continued its decline on Monday, influenced by investors observing upcoming crucial global developments this week. Notably, Tuesday's key July U.S. CPI data and the approaching deadline for a U.S.-China tariff deal have drawn attention, alongside a planned Russia-U.S. summit on Friday. Consequently, the dollar index retracted 0.2% to 98.073, following last week's 0.4% drop. The currency weakened against the yen, trading at 147.46, as Japanese markets remained closed for Mountain Day.

In the cryptocurrency sector, markets surged significantly. Bitcoin rose by 3% to $121,909.06, nearing its earlier record high, influenced by President Trump's executive order allowing cryptocurrency holdings in U.S. retirement accounts. Ether also climbed 2.1%, peaking at its highest since December 2021. The ongoing U.S.-China trade talks are crucial, especially with Trump setting a looming deadline for an agreement on chip policy.

Market sentiment suggests an extension of the deal is likely, potentially leading to another 90-day truce, as noted by analysts. As part of the trade discussion, semiconductor firms Nvidia and AMD might allocate 15% of their China sales to the U.S. government to secure export licenses. This proposal follows security concerns raised over Nvidia's new chips in China. Additionally, changes in leadership within U.S. monetary policy institutions are under scrutiny as potential candidates are considered for key roles.

(With inputs from agencies.)