1052 GMT – The dollar could weaken if erratic and unpredictable U.S. policy make foreign investors less willing to buy U.S. debt, Commerzbank’s Thu Lan Nguyen says in a note. Foreign investors have generously provided capital to the U.S., allowing the U.S. to spend it freely, she says. These investments were profitable for foreign investors, inflating their wealth and increasing U.S. foreign debt. “If foreign investors are no longer willing to lend capital to the U.S., perhaps because they fear lower returns, painful deleveraging would ensue.” This would be accompanied by a significant depreciation of the dollar, she says. The DXY dollar index rises 0.1% to 98.289. (renae.dyer@wsj.com)

Sterling Could Shrug Off Potentially Weaker U.K. Jobs Data

0831 GMT – U.K. employment data on Tuesday could be weaker than expected but this might not materially impact sterling, ING’s Francesco Pesole says in a note. The jobs data could be upwardly revised in coming months as witnessed recently, he says. The Bank of England also showed a relaxed stance about the slowdown in the jobs market at last Thursday’s meeting where it narrowly approved an interest rate cut. These factors mean the market could treat the data with more caution, Pesole says. Sterling trades flat at $1.3454. The euro rises 0.1% to 0.8656 pounds. (renae.dyer@wsj.com)