The United States dollar climbed to multi-week highs against major currencies as investors largely shrugged off geopolitical tensions between Washington and Caracas and instead turned their attention to upcoming U.S. economic data and interest-rate expectations.
Currency markets pushed the dollar to a 3½-week peak against the euro, while gains were also recorded versus the yen, Swiss franc, and Canadian dollar at the start of the first full trading week of 2026, reflecting renewed confidence in U.S. macroeconomic fundamentals.
Okay News reports that traders are prioritising a slate of U.S. economic indicators expected this week, which could influence the Federal Reserve’s policy outlook, rather than the escalating political crisis involving Venezuela.
The dollar advanced 0.3 per cent to $1.1682 per euro, after earlier touching its strongest level since December 10 at $1.1672, as demand for the greenback strengthened across global markets.
Against other currencies, the dollar rose to 157.295 yen, 0.7951 Swiss franc, and C$1.37771, all marking the highest levels recorded since December 22, underscoring broad-based dollar momentum.
Market expectations compiled by LSEG indicate that traders are currently pricing in two U.S. interest-rate cuts in 2026, though uncertainty around the timing and scale of easing continues to shape trading strategies.
Attention is also focused on the expected nomination of the next Federal Reserve chair, with President Donald Trump set to announce his choice this month ahead of the end of Jerome Powell’s term in May.
Trump has publicly stated that his nominee will favour significantly lower interest rates, a stance that has added another layer of speculation to currency and bond markets.
The dollar also edged 0.1 per cent higher to $1.3425 per pound sterling, while gaining 0.3 per cent to $0.6670 against the Australian dollar, extending its rally across developed-market currencies.
Despite reports that the United States conducted a weekend operation in Venezuela that resulted in the capture of President Nicolas Maduro, traders appeared largely unfazed, signalling that monetary policy expectations remain the dominant driver of currency movements.
Analysts say the dollar’s performance highlights how economic data and central-bank leadership prospects are currently outweighing geopolitical risks in shaping investor sentiment at the start of 2026.
