The Dollar Index reached its best level since May 1 before the weekend but has come back softer against all the G10 currencies and most emerging market currencies.
Equities are mostly higher, but the Asia Pacific region struggled. Gold recorded a bearish outside down day ahead of the weekend but there has been no follow through selling and softer dollar may have helped give it a mild bid today. August WTI rallied nearly 3.5% for the second consecutive week last week to approach $82 a barrel. It pulled back before the weekend but is firmer today above $81.

Asia Pacific markets
The regional highlights this week are focused on Japan, though Australia reports it May monthly CPI, which is expected to have risen to 3.8% from 3.6%. It will underscore the central bank's hawkish hold and may underpin the Australian dollar.

It has taken the market two months to return to almost JPY160 after the Japanese intervention in late April. The dollar's seven-day advance is the longest since March, when it moved rose in eight consecutive sessions.
A hawkish hold by the central bank helped the Australian dollar recover to the around $0.6680, stalling in front of the upper end of its trading range. A disappointing flash June PMI dragged the Aussie back to almost $0.6630. It is trading with a firmer bias today and hovering near the middle its $0.6600-$0.6700 range.

European markets
With a light economic agenda, little will distract market participants from the key political events in the coming days. The softer than expected German IFO survey follows on the heels of a disappointing ZEW survey but is not a market driver. Toward the end of the week, the heads of EU countries will meet to agree on the new roles in the EC.

The euro has been bid to session highs in the European morning near $1.0730, slightly above the pre-weekend high.
Sterling looks technically weak. However, it is trading quietly today in a little more than a third-of-a-cent range below $1.2670.

American markets
The highlight for the week in the US may be take place in a 12 hours window from Thursday night, when the first US presidential debate will be televised and Friday morning, when the May PCE deflator will be reported. Given the role of the electoral college, national polls may not be as important as votes in a handful of swing states.

After rising for five consecutive sessions, the Canadian dollar slipped lower before the weekend and has come back firmer today. The Canadian dollar has risen for eight of the past 10 sessions but is has gone virtually nowhere.