The U.S. dollar weakened on Monday as it consolidated at the beginning of a week filled with significant macroeconomic indicators, amid growing caution ahead of the U.S. presidential election.
Around 19:20 GMT, the greenback fell by 0.18% against the euro, trading at 1.0815 dollars per euro. It also declined by 0.11% against the British pound, reaching 1.2973 dollars per pound.
“This is a very important week… and today feels like the calm before the storm,” commented Marc Chandler of Bannockburn Global Forex to the media.
“The dollar’s performance is mixed as we embark on a week rich in data for the United States,” noted analysts at Brown Brothers Harriman.
Traders are particularly focused on the third-quarter GDP growth report scheduled for release on Wednesday, followed by the PCE index—the inflation measure favored by the Federal Reserve—set for Thursday.
In recent weeks, expectations of a more aggressive stance from the Fed than previously anticipated, along with the resulting rise in bond yields, have bolstered the dollar.
In September, the U.S. Federal Reserve reduced its key interest rate by half a percentage point.
Markets are now anticipating a quarter-point reduction at the next meeting on November 6 and 7, followed by another similar cut during the final meeting of the year in mid-December.
However, Chandler cautioned that “very weak figures in Friday’s October employment report could challenge the dollar’s momentum.”
