Dollar Rises Amid Economic Uncertainty: Eyes on U.S. Data Releases

The dollar gained strength against the euro and yen as traders remain cautious ahead of critical U.S. economic data releases. The anticipation follows a regulatory change and amid ongoing discussions about potential Federal Reserve rate cuts. Investors await upcoming employment statistics to gauge the economic outlook.

The dollar appreciated against the euro and yen on Monday, driven by trader caution ahead of significant U.S. economic data releases. This follows U.S. President Donald Trump's unexpected tariff reversal on over 200 food products, a move that has not significantly impacted the market due to longstanding cost-of-living concerns.

A slew of pending data delayed by the federal government shutdown is set to be released this week, offering potential insights into the state of the U.S. economy. Investors are especially focused on the forthcoming September nonfarm payrolls report due on Thursday, a key indicator of economic health.

Despite recent signs of economic weakness, a Federal Reserve rate cut is increasingly uncertain, with markets suggesting a 42% likelihood of a December rate reduction. Analysts caution that incoming data may not provide immediate clarity, though there are concerns about its implications for the labor market and the dollar's performance.

(With inputs from agencies.)