Forex Today: Dollar gains traction amid risk-off start to the week

Here is what you need to know on Monday, July 11:

Safe-haven flows dominate the markets at the start of the week and the greenback gathers strength against its rivals in the early European session. The US Dollar Index, which registered small daily losses on Friday, was last seen rising 0.5% on the day and US stock index futures were down between 0.8% and 1.1%. There won't be any high-impact data releases featured in the economic docket on Monday and the risk perception is likely to continue to dominate the market action. Bank of England Governor Andrew Bailey will testify before the UK's Treasury Committee.

Earlier in the day, the data from China showed that annual inflation, as measured by the Consumer Price Index, climbed to 2.5% in June from 2.1% in May. This reading came in higher than the market expectation of 2.4%. Meanwhile, the city of Shanghai reported they confirmed the initial case of the highly infectious BA.5 omicron sub-variant and warned of “very high” risks. Later in the day, city officials are expected to hold a press conference on new pandemic control measures.

In Europe, Nord Stream 1 Gas Pipeline's annual maintenance has started. Although this is a planned shutdown, investors are concerned about whether the reopening will occur as planned as well.

On Friday, the data published by the US Bureau of Labor Statistics showed that Nonfarm Payrolls rose by 372,000 in June, surpassing the market expectation of 268,000. This print came in higher than analysts' estimate of 268,000. Assessing the data, "June payrolls virtually guarantee a 75 basis point increase at the July 27 Federal Open Market Committee (FOMC) meeting," said FXStreet Analyst Joseph Trevisani. "Treasury futures have the odds for a three-quarters of a point hike at 93.0%, with 7.0% favoring a full 1.0%."

The recession next time, US employers hang tough with jobs.

EUR/USD turned south on Monday and started to push lower toward 1.0100. Despite Friday's modest rebound, the pair lost more than 200 pips last week.

GBP/USD closed the previous week above 1.2000 but reversed its course early Monday. In the early European session, the pair was trading in negative territory near 1.1970.

USD/JPY rose sharply during the Asian session and was last seen posting strong daily gains near 137.00. Earlier in the day, "we won't hesitate to take additional monetary easing steps as necessary," Bank of Japan Governor Haruhiko Kuroda said. 

Gold stays on the back foot early Monday and trades slightly below $1,740. The benchmark 10-year US Treasury bond yield holds steady above 3%, making it difficult for XAU/USD to stage a rebound.

Bitcoin continues to edge lower following Sunday's drop and closes in on $20,000. Ethereum is already down more than 2% on the day and trades near $1,100.