Dollar firms as traders look past Venezuela to flurry of US data

TOKYO: The dollar started the first full trading week of the New Year on the front foot, rising to a 3-1/2-week peak versus the euro and a two-week high against the yen.

Currency traders largely looked past the United States’ weekend raid in Venezuela and the capture of President Nicolas Maduro, focusing instead on a slate of U.S. macroeconomic indicators due this week that could be crucial in steering Federal Reserve policy.

The dollar added 0.1% to $1.1704 per euro , and earlier strengthened as far as $1.170025 for the first time since December 11.

It climbed 0.2% to 157.08 yen after reaching 157.255 for the first time since December 22.

“I dare say the FX complex is not much of a reflection of risks stemming from Venezuela, but more about what the U.S. data is going to tell us about the Fed’s policy path,” said Kyle Rodda, senior financial markets analyst.

A recent run of resilient U.S. data has markets contemplating a potentially slower pace of interest rate cuts this year, he said.

The data rollout this week begins with ISM manufacturing figures on Monday and culminates with the monthly non-farm payrolls report on Friday.

Traders currently expect two U.S. rate cuts this year, according to LSEG calculations based on futures.

Investors are also awaiting U.S. President Donald Trump’s choice for the next Fed chair, with Jerome Powell’s term ending in May. Trump has said he will announce his pick this month, and has said Powell’s successor will be “someone who believes in lower interest rates, by a lot.”

The dollar advanced 0.1% to $1.3443 per British pound , and gained 0.1% to C$1.3745 .

The Aussie declined 0.2% to $0.6682.

Reporting by Kevin Buckland; Editing by Sam Holmes and Himani Sarkar