The U.S. dollar posted modest gains on Monday, trading with a steady tone as investors looked ahead to a series of important U.S. economic releases now that the government shutdown has ended. The Federal Reserve’s final policy meeting of the year, set for next month, also remains in focus.
At 04:00 ET (09:00 GMT), the Dollar Index—which measures the greenback against six major currencies—was up 0.1% at 99.282, rebounding after a weekly decline.
Dollar steadies as markets await fresh economic signals
Traders are gearing up for a string of U.S. data releases this week, including Thursday’s widely watched September nonfarm payrolls report, seen as a key indicator of the strength of the world’s largest economy.
The government shutdown delayed numerous data publications, leaving both markets and Federal Reserve policymakers with limited visibility on recent economic trends.
“In a week when we should finally start to see US data releases coming through, it is important to note that the outcome of the next Fed rate decision in December looks better priced at a 50% chance of a cut,” analysts at ING wrote.
“That means that the dollar probably does not have to rally too much on the FOMC minutes released this Wednesday and can take its cue from Thursday’s jobs report.”
A packed lineup of Fed speakers is also on the agenda this week.
“A repeat of the Fed’s recent message that it should not rush into further rate cuts and some uncertainty as to where the neutral policy rate actually sits is probably a mild dollar positive,” ING added.
Euro slips after recent highs
In Europe, EUR/USD fell 0.2% to 1.1601, drifting away from last week’s two-week peak. The next major reading for the euro will be Friday’s flash November PMIs.
“Remember, these have been holding up quite well and are suggesting that businesses could be learning to live with the uncertain international environment here,” ING noted.
“The stronger dollar has dragged EUR/USD back to 1.1600. We would expect some demand to come in should it correct lower to the 1.1560/80 area.”
GBP/USD edged down 0.1% to 1.3162, with sterling stabilizing after sharp volatility late last week following news that Finance Minister Rachel Reeves does not plan to raise income tax in the upcoming budget. Reeves still faces the challenge of finding tens of billions of pounds to meet fiscal goals in the November 26 budget.
Yen weakens after Japan reports contraction
In Asia, USD/JPY moved up 0.1% to 154.68 after new figures showed that Japan’s economy shrank at an annualized pace of 1.8% in the third quarter. While the decline was smaller than the expected 2.5% drop, it still underscored softening momentum.
Quarter-on-quarter GDP slipped 0.4%, slightly better than forecasts but consistent with weakening activity. Exports were hit by the impact of newly imposed U.S. tariffs, and household spending remained subdued under persistent inflation pressures.
The one bright spot came from capital expenditure, which increased—suggesting that businesses are continuing to invest despite global trade challenges.
Elsewhere, USD/CNY rose 0.1% to 7.1045, while AUD/USD added 0.1% to reach 0.6534.
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