Dollar Dominance: A Rising Tide Amid Economic Uncertainties

The U.S. dollar sees significant gains post a robust jobs report, reducing expectations of Federal Reserve rate cuts. Inflation data and President Trump's economic plans add complexity to future monetary easing. Other currencies, including the euro, pound, and yen, face varying pressures, with China actively managing the yuan.

The U.S. dollar rallied on Monday, pushing rival currencies to multi-year lows following a strong U.S. jobs report. This surge highlights economic strength and complicates the prospect of Federal Reserve rate cuts this year. The dollar index climbed 0.24% to a high above 110, continuing its upward trend.

Friday's data revealed an unexpected surge in U.S. job growth and a drop in unemployment, prompting traders to reconsider Federal Reserve rate cuts this year. Current market sentiments have drastically altered, with even a single rate cut in 2025 appearing less likely than before.

Upcoming U.S. inflation data on Wednesday may further influence rate cut expectations if it confirms the Fed's hawkish stance on inflation. Meanwhile, President-elect Trump's economic policy proposals, including import tariffs and tax cuts, are expected to impact inflation and the monetary easing cycle.

(With inputs from agencies.)