Dollar edges higher ahead of Fed meeting, payrolls
Investing.com — The U.S. dollar edged higher in early European trade Monday, retaining support at the start of a week packed with risk events, including a Federal Reserve policy meeting and key employment data.
At 04:45 ET (09:45 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 103.362, remaining close to the six-week high of 103.82 it touched last week.
The dollar has seen small gains Monday, as the escalating geopolitical tensions in the Middle East after three U.S. service members were killed in an aerial drone attack on U.S. forces in Jordan over the weekend hit risk appetite.
Attention this week will squarely be on the Federal Reserve's two-day policy meeting, which concludes on Wednesday.
The U.S. central bank is widely expected to keep interest rates unchanged, with investors eagerly awaiting Fed Chair Jerome Powell’s post policy meeting press conference for any indication that officials believe they have progressed enough in their battle against inflation to begin cutting rates sooner rather than later.
Markets are currently pricing in a 48% chance of a rate cut in March, the CME FedWatch tool showed, compared with an 86% chance at the end of December.
Traders will also watch for a slew of economic data this week, including the widely-watched monthly payrolls report on Friday.
The economic calendar also includes data on JOLTS job openings and consumer confidence on Tuesday, followed a day later by a report on private sector payrolls and weekly data on initial jobless claims on Thursday.
In Europe, EUR/USD traded 0.2% lower at 1.0828, with the euro on course for monthly losses of around 2% after the European Central Bank last week held interest
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