The dollar index last trade flat at 81.612

Good Morning,

- The dollar trade steady after yesterday's gains on upbeat U.S. housing data and a rise in bond yields. The dollar index last trade flat at 81.612, after a gain of 0.2 percent on Monday.

- The market looked ahead to Wednesday's release of minutes from the FED's July policy meeting and comments from a global central banking summit in Jackson Hole, Wyoming, starting on Thursday.

- Consumer price inflation in UK is expected to float below the official target of 2% until the third quarter of 2017, according to Bank of England's August inflation report medium-term forecasts. The rate of Consumer Price Index CPI inflation in Britain remains subdued partly due to sterling's substantial gains against its major peers, especially the US dollar, in the last twelve months. The central bank's policymakers view sterling's appreciation as one possible downward pressure on import prices, and consequently, on CPI inflation. In July, inflation rate is expected to slow to 1.8%, down from a sudden spike to 1.9% in June

- JP Morgan on EUR/USD: A rather difficult market environment once again, as politics and the various crises are dominating market behaviour to a huge extent, notes JP Morgan. "What seems to be stable though is the broader up-trend of the USD, although we are seeing some hesitation in the latter as well, which didn't harm the positive bias so far," JPM adds. JPM sticks to its negative view, which doesn’t exclude a temporary extension up to 1.3474 and 1.3503 (minor 38.2 %/pivot) though. "Only a break above the latter would open the door for a broader recovery up to 1.3701 (pivot) and possibly to 1.3837 (int. 76.4 %) whereas a break below 1.3295 (pivot) would provide a fresh sell-signal," JPM projects. "Such a break would get 1.3104 (pivot) and weekly Ichimoku-support for the lagging line at 1.3088 into focus next," JPM adds.

- Back of hopes of an easing of geopolitical tensions. Russian officials said on Monday that all issues related to the country's humanitarian convoy to Ukraine had been resolved. But they added progress had not been made on reaching a ceasefire while Kiev and pro-Moscow forces accused each other of involvement in an incident in which dozens of refugees were killed.

- CFTC data released Friday for positions as of August 12, showed speculative accounts had a net euro short position of -126,017 contracts, only marginally trimmed from the prior week's net short of -128,747 contracts, which was the largest net euro short since Aug. 14, 2012 (-137,810 contracts).

- A bipartisan group of lawmakers on Monday urged the Federal Reserve to restrict its crisis lending programs for big banks, which were criticized as bailouts during the 2007-2009 meltdown. During the crisis, the Fed invoked its emergency lending powers to pump cash into Citigroup, Morgan Stanley and other banks to prevent the global panic from worsening. Fifteen lawmakers from both political parties and both houses of Congress said on Monday that the Fed has not done enough on its own to adequately limit its crisis lending powers. "If the board's emergency lending authority is left unchecked, it can once again be used to provide massive bailouts to large financial institutions without any congressional action," they said in a letter to Fed Chair Janet Yellen.

- The New Zealand dollar fell sharply to $0.8425 after soft wholesale inflation data and reduced government surplus forecasts suggested the Reserve Bank of NZ would be in no hurry to resume rate rises.

- Watch today: BoE set on rate rise, US chain stores, housing starts.

Have a nice Day!