Ammon News - The dollar edged down on Monday but remained within striking distance of its highest level in almost two weeks, as investors' focus moved to a U.S. jobs report due at the end of this week.

U.S. payrolls, due on Friday, will be crucial after Federal Reserve chair Jerome Powell pivoted from a battle against inflation to a readiness to protect against job losses.

Analysts say the job figures will determine the magnitude of the Federal Reserve's expected rate cut. Markets have already priced in for weeks a cut of 25 basis points.

The greenback advanced to its strongest since Aug. 20, buoyed by a rise in long-term Treasury yields to the highest since mid-August as inflation data pointed to a smaller rate cut and gross domestic product figures indicated the economy was on solid enough footing to give the Federal Reserve room to be less aggressive in easing its policy.

Traders currently lay 33% odds of a 50-bps Fed rate cut this month, while fully pricing in a quarter-point cut. A week earlier, expectations were 36% for the larger reduction.

The dollar index measure against six major peers weakened by 0.10% to 101.65, after hitting 101.79, a level not seen since Aug. 20.

The euro firmed to $1.1062, after hitting $1.1043, its lowest since Aug. 19.

Wall Street's main indexes ended higher on Friday, with the Dow scoring a second consecutive record close, after fresh economic data raised expectations that the Federal Reserve will start cutting interest rates in September.

Treasury bonds won't trade on Monday due to the U.S. holiday, but the 10-year yield stood at 3.9110% following a 4.4-bp rise on Friday.

The dollar rose as much as 0.05% to 146.26 yen .

The dollar index sank as low as 100.51 last week for the first time since July 2023 after Fed Chair Powell sent a strong message that the easing campaign would begin at the upcoming policy meeting.

Reuters