The dollar continues its gains ahead of key labor market data

The dollar index rose near the levels of 106.60 on Tuesday, continuing its gains since the beginning of this week, as the markets await a series of US labor market reports this week to assess the interest rate situation.

Vacancy data is due out on Tuesday, followed by Initial Jobless Claims on Thursday and the November nonfarm payrolls report on Friday.

The markets are also focusing on the speeches of several Fed officials, Fed Chairman Jerome Powell is scheduled to speak on Wednesday.

The US dollar also continued to rise amid expectations of an outperformance of the US economy, as well as concerns raised by Trump's threat at the weekend to impose 100% tariffs on BRICS countries if they try to exchange the US dollar for a new currency.

Here we review the movements of currencies against the US dollar :-

Japanese yen

The yen weakened slightly against the dollar today but remains near its six-week highs against the dollar, as traders are increasingly confident that Japan may raise interest rates later in December, and market pricing indicates almost 60% odds of a 25 basis point rate hike in Japan later in December.

The Japanese yen is the only currency of the group of ten that made gains against the dollar last month.

The European

Euro The European currency was the weakest currency in the group of ten during November, and this month began with a decline of 0.7% on Monday, and we still expect further declines as the government of France is heading for collapse due to the budget impasse.

Chinese yuan

Improving US manufacturing data and record-low Chinese bond yields pushed the yuan back strongly and opened the way for another wave of dollar strength.

China set the yuan's trading range at its weakest in more than a year, and traders rushed to sell the currency.

In addition, tariff risks have also prompted a further decline in the yuan, where it is currently trading at its lowest levels in more than a year.

Australian dollar

The Australian dollar pair retreated slightly on Monday as economic data was mixed, as the larger-than-expected current account deficit faced a rise in government spending and this is likely to boost growth.

And in the end the dollar usually suffers from seasonal weakness in December as companies tend to buy foreign currency for the dollar.

But this year, traders are cautiously watching the incoming administration of President-elect Donald Trump and keeping the dollar steady, especially after Trump's statements reinforced the opinion that Trump may not seek to weaken the US dollar during his presidential term, and will instead rely on tariffs to address the large trade imbalance in goods in the United States.