On Monday (June 7), the dollar index fell 0.17% to 89.98, while the dollar volatility index fell to a 15-month low. The yield on the benchmark 10-year Treasury note was at 1.569% at the end of the day, falling to 1.560% at one point in intraday trading and 1.628% on Friday. As the Fed holds its next interest rate resolution meeting on Wednesday, June 16, the Fed is likely to send signals to guide market interest rate expectations on Monday and Tuesday, while CPI data will be released on Thursday. In addition to the impact of risk sentiment and expectations of US interest rate policy, we also need to look at Chinese trade data, interest rate decisions of the Canadian Central Bank and the ECB, and South Africa's first-quarter GDP data this week.

Speculators reduced their net short positions in the dollar in the most recent week, according to Reuters calculations and data released by the Commodity Futures Trading Commission (CFTC) on Friday.

Thomas Flury, head of foreign exchange strategy at UBS Global Wealth Management, said the jobs data were not enough to lead the Fed to scale back its asset purchases or take more hawkish action at the next meeting, believing there was room for the dollar to depreciate further in the coming months. Ronald Simpson, managing director of global monetary analysis at Action Economics, said US bond yields were slightly higher in intraday trading, but were still well below where they were before the employment report was released. This may be the driver of dollar weakness on Monday. Bipan Rai, head of North American foreign exchange strategy at Canadian Imperial Commercial Bank Capital Markets, points out that at the moment, the market really looks like it wants to short the dollar. There are already quite a lot of net short positions in the dollar in the market, so we feel like we need to sort them out. However, Rai also said there was some risk of a rise in the dollar, noting that investors are still waiting for the Fed's meeting next week. Kengo Suzuki, chief foreign exchange strategist at Mizuho Securities, said that the market priced ahead of time and the Fed began to discuss the possibility of reducing its size, and now it is entering the consolidation stage. The reason for the low volatility is that low US yields limit the trend of the dollar.

The euro rose, boosted by corporate and speculative trading; it rose 0.2 per cent against the dollar after rising to its highest level since June 3. Dovish comments from ECB policymakers suggest that the central bank is in no hurry to slow its bond purchases under the 1.85 trillion euro ($2.24 trillion) pandemic emergency asset acquisition program, (PEPP). The dollar fell 0.25% against the yen to 109.25, hitting 109.19 in intraday trading, its lowest level since May 27. At one point, the pound rose 0.2 per cent to 1.4190 against the dollar. The dollar was flat against the Canadian dollar, and implied volatility fell across the board before the Bank of Canada announced its interest rate decision on Wednesday.

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