Quick overview

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The dollar began a week filled with events, with the US dollar dropping 0.2 percent on Monday. The US government is on the verge of shutting down as both political parties defend their positions.  This week also sees the release of several US economic data points, with the monthly jobs report set for Friday.

The yen is leading gains against the dollar, and Japan’s central bankers are scheduled to make speeches and release their own economic data.  Investors will watch for any of these events that affect projections for interest rate hikes by the Bank of Japan or cuts by the Federal Reserve. The dollar and yen would be impacted by either or both of those possibilities.

The Dollar Spot Index hit its lowest point since 2022 two weeks ago, but it has since recovered.
The recent increase in the value of the dollar coincides with investors lowering their expectations for further Fed interest rate cuts

. Fed Chair Jerome Powell recently reaffirmed his belief that policymakers might face challenges in the future due to risks to inflation and labor market outlooks, which led to a reversal in bets on policy relief.