The US dollar began the new week by maintaining its recent gains against major currencies. Strong employment data released on Friday strengthened expectations that the US Federal Reserve (Fed) could raise interest rates at its December meeting, while the dollar index held above the 102 level.
The index, which measures the dollar's value against six major currencies including the euro, rose approximately 0.7 percent following the employment data. On Monday morning, the index remained flat at 102.20.
Non-farm payrolls in the US increased by 165 thousand in October. Market expectations were at the 65 thousand level. The decline in the unemployment rate to 4.1 percent also signaled that the labor market remains resilient.
The euro lost 0.7 percent against the dollar on Friday, falling to 1.1132 dollars. Although it traded at 1.11485 dollars with a limited recovery in the new week, it remained near its lowest levels since May 2025. The pound rose 0.1 percent to 1.3360 dollars, while the dollar fell 0.1 percent against the Canadian dollar to 1.4119.
EYES ON INFLATION DATA
In futures markets, the probability of the Fed raising interest rates at its December 9 meeting has increased. According to CME Group's FedWatch tool, this probability rose to 79 percent; a week ago, the rate was at 71 percent. Market pricing also showed the probability briefly rising as high as 81 percent.
Investors are now awaiting inflation data that could provide clearer signals regarding the Fed's monetary policy. The US Consumer Price Index is expected to be released on Tuesday, and the Producer Price Index on Friday.
Recent messages from Fed officials have also highlighted inflation. New York Fed President John Williams stated that the US economy has shown resilience despite shocks, while noting that inflation is still high and must return to the 2 percent target. St. Louis Fed President Alberto Musalem also conveyed that inflation remains a primary concern among businesses.
The selling pressure in technology stocks has not yet reversed the dollar's rise. Data to be released this week is expected to be decisive for the direction of the dollar and interest rate expectations regarding the Fed.
News Source: 12punto
