Dollar Rallies Ahead of US Payroll Data

2 Sep 2024 , 09:43 AM

The dollar rose to a two-week high versus the euro on Monday as traders reduced their bets for rapid policy easing by the Federal Reserve, with the attention now shifting to a critical US employment report at the end of this week.

The dollar rose to its highest level against the yen since August 21, boosted by a rise in long-term Treasury yields to the highest level since mid-August after a closely watched measure of US inflation remained stable, reducing the need for the Fed to cut interest rates by a whopping 50 basis points (bps) on September 18.

It increased by up to 0.27% to 146.60 yen before closing at 146.29.

The dollar index against key rivals moved higher to 101.79 early in the Asian session, a level last touched on August 20.

The euro fell slightly to $1.0430, its lowest since August 19.

Traders are currently betting 33% on a 50-bp Fed rate cut this month, vs 67% on a quarter-point cut. A week earlier, 36% of people expected a larger reduction.

A U.S. public holiday on Monday could make for a quiet start to the week for the dollar, analysts say, but the rest of the days will see a constant flow of macroeconomic data culminating with non-farm payrolls on Friday.

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