Dollar Dominates Amid Fed Rate Cut Uncertainty

The dollar surged to a three-month high against the euro on Monday, continuing its upward trend from last week. Investors are expressing uncertainty about the Federal Reserve's next moves on interest rates, following Chair Jerome Powell's suggestion that further rate cuts this year may not occur without clearer economic indicators.

Due to the ongoing U.S. government shutdown, economic data is scarce, leaving investors reliant on non-government sources like ADP employment reports. The Federal Reserve faces internal debates on interest rate outlooks, with Fed Governor Stephen Miran advocating deeper cuts and Chicago Fed President Austan Goolsbee expressing caution due to inflation concerns.

While the euro and yen falter against the dollar, the pound also faces challenges as the Bank of England is expected to discuss possible rate cuts. As these dynamics unfold, the global economic picture remains complex, drawing attention to upcoming central bank meetings and policy statements.