He global dollar fell on Monday from a near two-year high, as traders reversed some of the rally seen over the holiday period ahead of key U.S. economic data. USAscheduled for this week.
Many currencies fell against the dollar in light trading over the holiday period as investors focused on the likely strength of the U.S. economy in 2025 and the president-elect’s tariff policies. donald trumpReuters reported.
However, the US currency fell this Monday and the dollar index fell 0.48% to 108.44, below the more than two-year high of 109.54 reached on Thursday.
“This week we will see a return to normal market conditions and a recovery of the exchange liquidity“said Francesco Pesole, currency strategist at ING. “That could lead to some moderation in the dollar’s momentum, as the greenback could reconnect with the slight deterioration in its rate advantage over the festive period,” he added.
The US bond yields remained relatively stable during the holiday period, while those of Germanythe euro zone benchmark, rose.
He euro It rose 0.55% to $1.0368, moving away from a 25-month low hit last week. Sterling was up 0.52% at $1.2488 after falling to an eight-month low on Thursday.
He chinese yuan was in focus after it weakened beyond the psychological level of 7.3 per dollar in the onshore market for the first time in 14 months on Friday, after the People’s Bank of China (PBOC) aggressively defended that key threshold during most of December.
“Renminbi weakness has accelerated recently in anticipation that President-elect Trump will move quickly to further increase tariffs on imports from China,” said Lee Hardman, senior currency analyst at MUFG.
He also cited “the marked widening of yield differentials between the United States and China, which are fueling a weakening of the renminbi.”
Before the market opens on Monday, the People’s Bank of China set the average exchange rate, around which the yuan can trade in a 2% band, at 7.1876 per dollar.
In Canadait is increasingly likely that the prime minister Justin Trudeau announce his intention to resign, although he has not made a final decision, a source told Reuters.
Markets appear to have largely factored in and could welcome an election to clear things up, leaving the US dollar 0.36% lower against its Canadian counterpart at C$1.4395.
Attention in the United States
Investors were attentive to the report non-agricultural employment December U.S. report, to be released Friday, to gain more clarity on the health of the world’s largest economy.
It is expected that a series of those responsible for the monetary policy of the Federal Reserve (Fed) speak this week and are likely to reiterate recent comments that the battle to control the inflation It’s not over yet.
He dollar has strengthened on expectations of fewer Federal Reserve rate cuts this year, and its rise to a two-year high last week pushed the euro to its weakest level in more than two years.
Another factor that has provided the dollar with additional support as a safe haven has been the uncertainty over Trump’s plans to impose strong import tariffstax cuts and immigration restrictions after his inauguration on Monday the 20th.
“There is still enormous uncertainty about the speed at which we will see policy announcements and to what extent reality will match the rhetoric, so I think that leaves enormous uncertainty in the markets,” said Ray Attrill, head of foreign exchange strategy. in National Australia Bank.
Source: Ambito
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