The dollar edged higher against major currencies on Monday as traders took a cautious stance ahead of a packed week marked by the long-delayed return of U.S. economic data. The muted reaction to President Donald Trump’s reversal of tariffs on more than 200 food products suggested markets had largely anticipated the shift, given the political pressure tied to rising living costs.
Starting this week, a backlog of indicators postponed by the federal government shutdown will be published, including Thursday’s closely watched September nonfarm payrolls report. Investors are looking to the data to assess the true state of the U.S. economy after weeks of uncertainty.
Markets brace for long-awaited economic figures
“They are just waiting for the next shoe to drop,” said Marc Chandler, chief market strategist at Bannockburn Global Forex, noting that dollar moves remain closely tied to interest-rate expectations. Despite recent signs of softening in private-sector activity, traders have scaled back their outlook for a Federal Reserve rate cut in December, with market pricing now showing a 42 percent probability for a quarter-point reduction, down from more than 60 percent earlier in the month.
Analysts at Goldman Sachs warned that although the data flow is finally resuming, early releases may not offer decisive clarity. They expect it will take time before the numbers reflect real underlying momentum. In their view, weaker labor-market readings over the medium term could settle debates within the Federal Open Market Committee and ultimately weigh on the dollar.
Joseph Trevisani, senior analyst at FX Street, said traders are waiting for confirmation that employment conditions are improving. “If we don’t get an improvement in the employment figures, especially in the ones the market always looks to,” he said, “then speculation will start up again on the Fed continuing to lower rates.”
Currency moves remain modest as traders stay cautious
For now, major currency pairs remain range-bound. The euro slipped 0.32 percent to 1.1582 dollars, while the yen weakened 0.47 percent to 155.255 per dollar. Sterling edged down 0.1 percent to 1.3161 dollars as investors focused on the United Kingdom’s upcoming November 26 budget and another round of inflation data this week.
The Swiss franc, often used as a haven during market stress, eased to 0.7957 per dollar after briefly touching a one-month high during last week’s global stock market volatility.
Yen holds near multi-month lows despite recession signal
The yen showed little reaction to new figures confirming that Japan’s economy contracted at an annualized 1.8 percent in the July to September period. The downturn, driven by falling exports under U.S. tariffs, marked the country’s first negative reading in six quarters.
Despite the weak domestic data, currency traders remain alert to the risk of intervention from Japanese authorities. The yen is hovering near a nine-month low, and memories of Japan’s market action last July—when officials intervened as the currency fell to a 38-year low around 161.96 per dollar—keep investors on watch.
