Dollar Stays Near Two-Year High as Yuan Breaks Key 7.30 Level and US Jobs Data Looms

On Monday, the U.S. dollar hovered close to a two-year peak as markets braced for key U.S. economic data this week, particularly Friday’s December nonfarm payrolls report, to gauge the Federal Reserve’s likely interest-rate path. Meanwhile, the Chinese yuan remained under pressure after the onshore yuan on Friday broke through the closely watched 7.30-per-dollar level for the first time in 14 months, with analysts noting that the People’s Bank of China appeared to have eased its defense of that threshold. The offshore yuan weakened slightly further to around 7.3630, raising speculation that Chinese authorities may now tolerate a higher trading range, which could weigh on other Asian currencies and commodity-linked pairs such as the Australian and New Zealand dollars. Elsewhere, the euro slid to fresh two-year lows near $1.0296, sterling eased to $1.2420, and the yen weakened toward 158 per dollar, while lingering uncertainty over Donald Trump’s upcoming inauguration and his promised tariffs, tax cuts, and immigration policies continued to bolster the dollar’s safe-haven appeal, leaving traders reluctant to bet against further greenback strength.

Asian currencies are mixed on Friday. Japanese yen is down 0.10%. The Indonesian rupiah is down by 0.08%, while the Indian rupee is down 0.04%. The Malaysian ringgit is up by 0.54%, and the Philippine peso is down by 0.06%. The Australian dollar higher by 0.05%, the Singapore dollar is higher 0.18%, and the South Korean won is flat.