US Dollar Rises to Two-Week High Ahead of Key Economic Data

The US Dollar Index posted notable gains during Monday trading, surpassing 98.5 points and reaching its highest level in about two weeks. This upward move comes as investor attention turns to a series of upcoming US economic data releases this week, which are expected to play a key role in shaping monetary policy expectations for the Federal Reserve.

This development follows the US military operation in Venezuela, resulting in the arrest of President Nicolás Maduro, which has led to a moderate increase in geopolitical risks. However, the direct impact on currency markets has so far remained limited.

Investors are mainly focused on the US December jobs report due on Friday, along with JOLTS and ADP employment data, ISM manufacturing and services indices, and the University of Michigan consumer sentiment survey. These figures will be closely watched to gauge the strength of the labor market and the inflation path ahead of any new monetary moves.

Currently, markets are pricing in two possible US interest rate cuts this year, in contrast to the Federal Reserve's official forecast of just one cut. Further sensitivity surrounds President Donald Trump's upcoming announcement of his nominee for Fed chair later this month, with expectations that the new candidate may support the White House's push for lower borrowing costs.

This divergence between market bets and Fed messaging is making the dollar highly sensitive to surprises in upcoming data, which could determine its direction in the early weeks of the year.