Dollar Dominates as U.S. Jobs Surge Spurs Market Reassessment

The U.S. dollar hit a seven-week high as the market reacts to robust U.S. jobs data and Middle Eastern tensions. Investors reassessed rate cut expectations amidst geopolitical uncertainties and economic fluctuations. European struggles and Japanese market interventions further influenced global currency dynamics.

The U.S. dollar remained near a seven-week peak on Monday as investors re-evaluated their positions following strong U.S. jobs data released on Friday and amid escalating tensions in the Middle East. The significant increase in payrolls, a drop in unemployment, and solid wage hikes have led markets to scale back bets on significant U.S. rate cuts.

The dollar index was slightly down at 102.47 after reaching a seven-week high of 102.69 on Friday. Last week's performance marked its largest weekly gain in two years, spurred by Friday's labor data affecting U.S. interest rates, as noted by Marc Chandler of Bannockburn Global Forex.

The dollar's performance against the yen was impacted by Japan's cautionary stance on forex market speculation. Meanwhile, the euro remained stable despite a drop in German industrial orders. Investors are keenly watching possible U.S. Federal Reserve moves, priced in at a modest 25 bps rate cut for November.

(With inputs from agencies.)