The euro was last at $1.1060, while the yen fetched 147.10 per dollar in early trading, close to the two-week low of 147.16 reached on Monday
The dollar held close to a two-week high against the yen and the euro on Tuesday as investors braced for a slew of economic data, including Friday’s U.S. payrolls, that will influence the size of an expected interest rate cut from the Fed.
The euro was last at $1.1060, not far from the two week low of $1.1042 it hit in the previous session, while the yen fetched 147.10 per dollar in early trading, close to the two-week low of 147.16 reached on Monday.
Investor focus this week will be on the U.S. payrolls data due on Friday after Fed Chair Jerome Powell last month endorsed an imminent start to interest rate cuts in a nod to the concerns over the labour market.
Ahead of that job openings data on Wednesday along with jobless claims report on Thursday will be in the spotlight.
Markets are pricing in a 69% possibility of a 25 bps cut when the Fed meets September 17-18, with 31% chance of a 50 basis points cut, according to CME FedWatch tool.
This week’s overload of labour data will be crucial in breaking the debate between a 25 or 50 bps cut in September, according to Charu Chanana, head of currency strategy at Saxo.
If the data remains robust, a 25 bps cut is more likely. However, a weak non-farm payrolls, particularly if it drops below 130k with another jump higher in unemployment rate, could push the rates market closer to pricing a 50 bps cut, Chanana added.
The dollar index was at 101.69 in early trading, just below the two-week high of 101.79 it hit on Monday. The index declined 2.2% in August on expectations of U.S. rate cuts.
