Dollar rises to 2-week high against Euro on Monday
(MENAFN) The dollar climbed to a two-week high against the euro on Monday as expectations for aggressive monetary easing in the U.S. began to ease, with traders focusing on this week's upcoming U.S. jobs report. The dollar also reached its highest point against the yen since August 21, bolstered by an increase in long-term U.S. Treasury yields, which hit their highest levels since mid-August. This rise in yields came after inflation data showed only minimal decline, lowering the chances of the Federal Reserve cutting interest rates by 50 basis points on September 18.
Just a week ago, traders were more inclined to believe in a significant rate cut, with a UK news agency reporting that 36 percent favored this possibility. However, the dollar's strength has shifted expectations, with the dollar index, which measures the currency against six major rivals, rising to 101.79 points at the start of trading in Asia—a level last seen on August 20. The index slightly eased to 101.72 points in the latest trading.
Meanwhile, the euro dropped to USD1.1042, marking its lowest point since August 19, before recovering slightly to USD1.1046. Analysts noted that the U.S. public holiday on Monday likely influenced the dollar's performance, but they also pointed out that the next few days are expected to bring a series of important economic data releases, including Friday's non-farm payrolls report.
Although U.S. Treasuries will not be trading on Monday due to the holiday, the yield on the 10-year note remained at 3.9110 percent, after increasing by 4.4 basis points on Friday. The British pound remained steady at USD1.31255, close to Friday's low of USD1.31095, which was its weakest level since August 23.
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