The dollar index steadied around 98.5 on Monday, holding gains from the previous session amid easing US-China trade tensions, with President Donald Trump stating that his proposed retaliatory tariffs on China would not be sustainable. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet this week in an effort to defuse tensions ahead of a possible Trump-Xi meeting later this month. Investors also awaited the September CPI report due Friday, expected to show inflation remains elevated. Traders are closely watching the report given the ongoing data blackout from the government shutdown. On the monetary policy front, the Federal Reserve is widely expected to cut interest rates by 25 basis points next week, with another reduction seen in December and possibly three more next year, as policymakers weigh softening labor market conditions against persistent price pressures.
