DXY: Dollar Index Steady Near 106.50 Ahead of This Week’s Nonfarm Payrolls Data

Volatility is expected to pick up with the release of the US jobs report for November. Analysts eyeball 202,000 new jobs created.

• The US dollar index DXY was floating fairly flat and unchanged early Tuesday as traders were keeping calm ahead of the monthly jobs data. Due for release on Friday, the nonfarm payrolls for November will shed light on the economic trajectory, the path ahead for the US dollar, and the timeline for interest rates. The US dollar index, tracking the greenback’s valuation against six rival currencies, traded near 106.50.
• The greenback has rallied hard in recent weeks, climbing to a one-year high after Donald Trump’s victory in the US election on November 5. The President-elect’s agenda includes policies that lean heavily in favor of the US dollar, such as higher tariffs on imports, lower taxes on corporations and broad deregulation for domestic businesses. All that has an added bonus to the dollar’s appreciation — inflation might creep back up again.
• And that’s where interest rates come in play. The Federal Reserve meets on December 17-18 for its final meeting of the year. A cut to the tune of 25 basis points is now getting priced in by the markets. Policymakers at the central bank have said they’re happy with the progress over combating inflation and see no immediate risks to the economic stability. Still, with Trump’s bold steps forward, a surprise no-cut event might send investors scrambling.