USD Heads for 111.00!

The US Dollar Index (DXY) is on its recovery journey from a monthly low from the previous week as it modestly bids near 110.80 on Monday's Asian session. As a result, the greenback's index against the six major currencies gains from the market's rush for risk safety before the important US data and events and from the worries sparked by geopolitical concerns.

The United Nations (UN) grain deal with Russia and Ukraine has recently been in the news, which seems to have challenged people's willingness to take risks. Following an attack on the Black Sea fleet, Russia, which invaded Ukraine on February 24 this year, halted its participation in the Black Sea agreement on Saturday for an “indefinite term”. According to Reuters, a prominent news agency company, Russia's stance could be due to the unguaranteed safety of civilian ships travelling under the pact after an attack on its Black Sea fleet.

The upcoming US Core Personal Consumption Expenditures (PCE) Price Index's high readings on Friday, the Fed's favoured inflation gauge, also helped to keep the DXY stronger. However, the sixth consecutive quarter of falling US private consumption adds to concerns about a slower rate hike by the US Federal Reserve (Fed) beginning in December, which will put the US dollar bulls to the test.

Goldman Sachs economists recently increased their forecast for Fed interest rates, which they predicted would peak at 5% in March. The CME's FedWatch Tool, which indicates an 80% chance of the Fed's 75 basis point rate hike during Wednesday's Federal Open Market Committee meeting, was also on the same page (FOMC).

The yields were lower during these plays, and US stocks were anticipating a strong month, with the Dow Jones expected to have its greatest monthly increase since 1976. In addition, despite the lacklustre markets, the S&P 500 Futures are still moderately offered near 3,910.

Future Federal Open Market Committee (FOMC) meetings will be critical for DXY as traders wait for the Fed's next moves in light of the 75 basis point rate estimates for this week's meeting.

The US jobs data is another significant report to be on the lookout for, as it is due this upcoming Friday.

It is essential for retail forex traders to stay up-to-date with the upcoming economic events, typically as we enter into a new month. Download the free WikiFX mobile application and check out our 24*7 news column and economic calendar so you can conveniently strategize your trading prior to such important announcements.