Global dollar falls from nearly two-week highs

He global dollar fell on Monday, but remained near its highest level in nearly two weeks, as investors’ attention shifted to a report from employment of USA which will be published later this week.

He dollar advanced to its strongest level since August 20, driven by a rise in bond yields. Treasury bonds long-term also at its highest level in 15 days, as data from inflation and GDP figures indicated that the US economy is on a solid enough footing to give it a go Booking Federal (Fed) room to be less aggressive in easing its monetary policy.

Traders currently estimate there is a 33% chance that the Fed cut rates by 50 basis points this month, although they are already pricing in a quarter-point cut. A week earlier, expectations were at 36% for a larger reduction.

He dollar indexwhich measures the currency against six peers, weakened 0.10% to 101.65, after hitting 101.79, a level not seen since Aug. 20. It fell to 100.51 last week for the first time since July 2023 after Fed Chairman Jerome Powellwill send a strong message about the start of rate cuts.

He euro advanced 0.2% to $1.1068, after touching $1.1043, its lowest level since Aug. 19. On the European political front, projections showed that Alternative for Germany (AfD) was on track to become the first far-right party to win a regional election in Germany from the Second World Warwhich gave him unprecedented power, even though other parties would surely exclude him from power.

Some investors fear that a political stalemate in Germany and France prevent that Europe move forward with integration initiatives that could boost growth and enable the European Union (EU) play a greater role in world affairs.

In Uruguayhe dollar September begins consolidated in the 40 pesos range after closing August its fifth consecutive month of rising prices.

Meanwhile, the holiday in the United States this Monday makes the dollar have a potentially slow start to the week, analysts said, but there will be a steady stream of macroeconomic data in the days ahead culminating in nonfarm payrolls on Friday.

Economists polled by Reuters expect 165,000 U.S. jobs to be created in August, up from an increase of 114,000 in the previous month. If the projection is met, the data would be consistent with a “soft landing” and a relaxation of policy by the Fed by 25 basis points this month.

In Japanhe dollar rose 0.40% to 146.74 yen. Analysts argued that it would be difficult to see the dollar rally against the yen at a time when the Fed is on the verge of cutting rates.