Dollar Dips as Market Awaits U.S. Economic Data Amid Global Currency Fluctuations

The dollar retreated from a two-year high as traders adjusted to normal market conditions following the holiday period. The focus shifts to upcoming U.S. economic data, while the Chinese yuan hit a 16-month low due to trade concerns. Potential political changes in Canada also piqued interest.

The dollar fell from a two-year peak on Monday, as traders recalibrated following a holiday rally, ahead of key economic data this week. Among global currencies, China's yuan sunk to a 16-month low amid concerns about upcoming U.S. trade policies.

Prime Minister Justin Trudeau may soon announce his plans to step down, according to a source, affecting Canadian markets. The U.S. dollar slipped against the Canadian currency, reflecting market anticipation of political changes.

Globally, currencies eased against the dollar during the holiday lull, but normal trading conditions stirred activity. Economic indicators and comments from Fed policymakers will drive upcoming monetary decisions impacting currency fluctuations.

(With inputs from agencies.)