Dollar edges higher ahead of data releases

The dollar index climbed above 99.4 on Monday, partially reversing last week’s pullback as traders positioned themselves ahead of a busy slate of US economic releases that had been postponed during the government shutdown.

With several weeks of official statistics delayed, investors are looking for fresh signals to recalibrate expectations for Federal Reserve policy and assess the underlying strength of the US economy.

The September non-farm payrolls report, due Thursday, is expected to be the focal point, offering the first comprehensive look at labor-market conditions since the shutdown.

Markets are also awaiting clarity on when other key reports—such as CPI, PPI, and retail sales—will be added back to the release calendar. Until then, traders are placing greater weight on high-frequency private-sector data.

This week’s lineup includes the flash S&P Global PMIs, existing home sales, the NAHB housing market index, and the weekly ADP employment aggregate, all of which could influence short-term dollar swings and Fed expectations.

Recent comments from Federal Reserve officials have leaned more hawkish, with several policymakers expressing skepticism about the necessity of a December rate cut and some openly dismissing the idea under current economic conditions. As a result, markets now assign roughly a 46% probability of a 25-basis-point reduction next month, down steeply from around 88% just one month ago, reflecting a notable shift in sentiment.

The dollar advanced against most major currencies on Monday, with its strongest gains coming against the New Zealand and Australian dollars, as softer commodities and cautious risk appetite weighed on the region’s high-beta currencies.

The greenback also firmed modestly against the euro and yen, though lingering uncertainty around the data backlog kept moves measured.

Looking ahead, currency volatility is likely to pick up as investors digest the incoming data and reassess the Fed’s policy trajectory into year-end.