The dollar is strong and the pound is still under pressure
The US dollar rose on Monday with the beginning of the week's trading, pushing its counterparts to its lowest levels in several years, especially after the US jobs report released last Friday, which confirmed the strength of the world's largest economy.
Data on Friday showed that US job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1%, confounding expectations for further interest rate cuts by the Fed this year.
Markets are now pricing in just 27 basis points of interest rate cuts this year, down from about 50 basis points at the start of the year.
Markets are also waiting for US inflation data next Wednesday, which would threaten to completely close the door to easing in the event of its release on any bullish surprise, and a large number of Fed officials are also scheduled to speak this week.
Trump's plans to impose heavy tariffs on imports, tax cuts, as well as restrictions on immigration could also fuel inflation.
DXY
The dollar rose to its highest in more than two years on Monday against a basket of currencies, peaking near the 110.00 levels.
Other currencies also recorded new lows against the backdrop of a strong dollar.
EURUSD
The euro recorded its weakest level since November 2022 at 1.0210 dollars.
GBPUSD
The British pound was one of the biggest losers, falling by more than 0.5% to a 14-month low of 1.2123 dollars.
The British pound is still at the mercy of the defeat of the government bond market and fears at home about rising borrowing costs.
AUDUSD
The Australian dollar also fell to its lowest level since April 2020 at 0.6130 dollars.
NZDUSD
The New Zealand dollar fell again to its lowest level in more than two years near the levels of 0.5544.
USDJPY
Despite the apparent strength of the dollar against most currencies, the yen rose against the US dollar, and the dollar-yen pair reached levels of 157.25, especially after the news that policymakers at the Bank of Japan may raise their inflation forecasts at this month's policy meeting in preparation for raising interest rates again.
