Dollar Rises Amid US Economic Indicators and Market Speculation

The U.S. dollar began the new trading year robustly, peaking against the euro and yen amid a focus on economic indicators. Despite a significant geopolitical event—the U.S. raid in Venezuela—traders largely ignored it, concentrating instead on upcoming U.S. economic data crucial for Federal Reserve policy.

The dollar rose 0.1% to $1.1704 per euro and strengthened to 157.08 yen, figures last seen in mid-December. Analysts, including Kyle Rodda of Capital.com, suggest that the recent economic resilience in the U.S. points to a potentially slow pace of interest rate cuts, keeping traders attentive.

The week’s economic data release begins with the ISM manufacturing figures, ending with the monthly non-farm payrolls report. The market is currently pricing in two U.S. rate cuts this year. Investors also await President Trump's decision for the next Federal Reserve chair, impacting future rate policies.