The Dollar started the first full trading week of 2026 by climbing to multi-week highs against a range of currencies after a weak December, with the main focus on this week’s raft of key economic data.
Traders were also keeping a watchful eye on events in Venezuela, after the United States (US) raid and capture of President Nicolas Maduro.
President Donald Trump told reporters on Sunday he could order another strike if with US efforts to open up its oil industry and stop drug trafficking.
He also threatened military action in Colombia and Mexico.
With a fraught geopolitical backdrop, the Dollar edged up, but analysts said it may be too soon to declare this to be a durable rally.
The US monthly employment report, due on Friday, will be key in shaping expectations for the outlook for monetary policy, an arguably weightier factor for the Dollar.
The Dollar index rose for a fifth day , up 0.25% at its highest since December 10, largely as a function of weakness in the euro , which fell 0.31% to $1.16845, its lowest since that same date.
The Dollar index lost 1.2% in December, its weakest performance since August.
“Whilst we see that geopolitical risk, I think we shouldn’t be stuck on it. Soon, we’ll come crashing back into the reality of macroeconomics, because there is a slew of US data through the course of this week,” Jeremy Stretch, Head of G10 FX Strategy at CIBC Markets, said.
–Reuters–
