Dollar On Edge As Market Awaits Crucial U.S. Economic Data

The dollar slightly decreased but held near a two-year high as traders anticipated U.S. economic data, including the nonfarm payrolls report, for insights on the Federal Reserve's rate outlook. The focus remains on the Chinese yuan's devaluation and remarks from Fed policymakers regarding inflation.


Devdiscourse News Desk | Updated: 06-01-2025 08:13 IST | Created: 06-01-2025 08:13 IST
Dollar On Edge As Market Awaits Crucial U.S. Economic Data
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The dollar experienced a slight dip on Monday, maintaining proximity to a two-year peak. Traders are on high alert this week as significant U.S. economic data, particularly December's nonfarm payrolls report, looms large, offering potential insight into the Federal Reserve's rate plans. Meanwhile, the devaluation of the Chinese yuan remains a focal point.

The onshore yuan dropped past the 7.3 per dollar mark for the first time in 14 months, following the People's Bank of China's decision to cease defending this level in December. National Australia Bank's Ray Attrill speculated that the PBOC might now permit a higher trading range for dollar/CNY.

Ahead of Monday's trading session, the PBOC set the midpoint rate for the yuan at 7.1876 per dollar, causing peripheral currencies like the Australian and New Zealand dollars to experience minimal effects. Meanwhile, in Canada, concerns loom over Prime Minister Justin Trudeau's rumored resignation. The market braces for U.S. economic indicators, with eyes on the impending U.S. presidential policies that could sway the dollar's strength.

(With inputs from agencies.)

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