Jan 29, 2024: The U.S. dollar has made slight gains in early European trading on Monday, maintaining its strength as the new week kicks off with several significant events, including a Federal Reserve policy meeting and crucial employment data.
As of 04:45 ET (09:45 GMT), the Dollar Index, which measures the dollar against a basket of six major currencies, is trading 0.1% higher at 103.362. This level is close to the six-week high of 103.82 reached last week.
The dollar’s marginal gains on Monday can be attributed, in part, to escalating geopolitical tensions in the Middle East. The situation intensified after a drone attack on U.S. forces in Jordan resulted in the death of three U.S. service members over the weekend, impacting overall risk appetite.
All eyes are on the Federal Reserve’s two-day policy meeting scheduled to conclude on Wednesday. While it is widely anticipated that the central bank will maintain current interest rates, investors are eagerly anticipating insights from Fed Chair Jerome Powell during the post-policy meeting press conference. Any indications that officials believe progress has been made in the battle against inflation, potentially leading to earlier rate cuts, will be closely monitored.