Dollar's Dance: Awaiting Labor Data and Fed Decisions

The dollar wavered on Monday with global markets eagerly awaiting pivotal U.S. labor market data expected this week, which could significantly impact the Federal Reserve's decision on a rate cut later this month.

Investors were also digesting recent U.S. inflation data and a ruling deeming most of Trump's tariffs illegal, alongside the President's legal battle to remove Fed Governor Lisa Cook. The dollar gained 0.1% against the yen, surging to 147.20 in the Asian session after a monthly drop against the Japanese currency.

Key events this week include the U.S. nonfarm payrolls report and data on job openings and private payrolls. Currency strategist Carol Kong of Commonwealth Bank of Australia noted the market's keen attention to these figures, which could bolster or dampen expectations for a rate cut, influencing whether it will be 25 or 50 basis points.

(With inputs from agencies.)