• US Dollar recovers following last Friday’s gains.
• Inflation data takes center stage, CPI expected to show moderation.
• Fed easing expectations have steadied with market pricing in less aggressive cuts.

The US Dollar Index (DXY), a measure of the US Dollar against a basket of six currencies, extended its recovery on Monday ahead of key inflation data releases this week. Following the mixed labor market figures reported last Friday, the focus shifts to upcoming inflation data, with Consumer Price Index (CPI) figures expected to show moderation. Technical analysis indicates the potential for further US Dollar gains in the near term.

Despite positive growth indicators, the US economy faces potential risks. While the economy remains strong, the market may be overly optimistic in pricing future interest rate cuts.