Dollar Rally: Navigating Global Economic Indicators & Fed Policy

The dollar surged at the start of 2026's trading sessions, reaching multi-week highs against major currencies. Traders focused on upcoming U.S. economic indicators that could influence Federal Reserve policy, overshadowing geopolitical events like the U.S. raid in Venezuela. Key data releases, including ISM manufacturing and non-farm payrolls, are anticipated.

As 2026 trading begins, the dollar is making waves, hitting significant highs against the euro, yen, Swiss franc, and Canadian dollar. Traders, seemingly unfazed by recent geopolitical upheaval in Venezuela, shift their focus to pivotal U.S. economic data expected this week, which could shape Federal Reserve policy moving forward.

The dollar appreciated by 0.3% to $1.1682 per euro, marking its strongest position since mid-December, and rose significantly against other major currencies. This trend suggests optimism surrounding the upcoming U.S. data and speculation on the Federal Reserve's future moves.

Key economic reports such as ISM manufacturing results and the employment figures will be crucial this week as market participants anticipate possible changes in interest rate policies, especially with the term of Fed Chair Jerome Powell nearing its end, and new leadership potential in the spotlight.

(With inputs from agencies.)