Dollar Surges Ahead of U.S. Jobs Data

3 Sep 2024 , 11:23 AM

The dollar edged higher and hovered near to a two-week high on Tuesday as investors braced for a barrage of economic data, including Friday’s US payrolls, which might affect the extent of the Federal Reserve’s expected interest rate cut.

The euro was down 0.16% at $1.1055, close to the previous session’s two-week low of $1.1042, while sterling fell 0.17% to $1.3124.

The dollar index, which measures the US currency against six rivals, rose 0.11% to 101.77, just shy of the two-week high of 101.79 set on Monday. The index sank 2.2% in August on anticipation of US interest rate reduction.

Investors will focus this week completely on the U.S. payrolls report, which is due on Friday, after Fed Chair Jerome Powell last month advocated an impending start to interest rate decreases in response to labour market concerns.

Prior to that, job openings data on Wednesday and the unemployment claims report on Thursday will be closely watched.

Markets expect the Fed to lower interest rates by 25 basis points (bps) when it meets on September 17-18, with a 31% chance of a 50-bps cut, according to the CME FedWatch tool.

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