The US dollar held steady on Monday as traders awaited a busy week of Federal Reserve speeches that could offer fresh signals on the future path of interest rates. This comes after the Fed resumed its easing cycle last week, sparking renewed focus on the outlook for monetary policy.
Currency movements in the Asian session were calmer compared to last week’s volatility, which was driven by multiple central bank decisions, including those from the Fed, the Bank of England (BoE), and the Bank of Japan (BOJ).
The Japanese yen slipped 0.2% to 148.26 per dollar, giving back some of Friday’s gains. The decline followed hawkish comments from the BOJ that fueled expectations of a possible rate hike in the near term.
Meanwhile, the British pound fell to a two-week low of $1.3453, pressured by concerns over rising UK public borrowing and the BoE’s rate decision. Analysts highlighted that the combination of weaker growth and stubborn inflation continues to pose a challenge for policymakers.
Rabobank strategist Jane Foley said the bank now expects the BoE’s next rate move to come in 2026, but warned that sterling is likely to stay under pressure through the autumn as investors focus on the UK’s fiscal outlook.
The broader dollar index rose slightly to 97.78, extending its rebound from last week’s sharp drop after the Fed’s rate cut. The euro slipped 0.15% to $1.1731.
Markets will closely watch a series of speeches from Fed officials this week, including Chair Jerome Powell. Investors are looking for insights on the US economy, rate policy, and the Fed’s independence. Of particular interest is a speech from new Fed Governor Stephen Miran, who recently dissented in favor of a larger 50-basis-point cut and promised to explain his stance in detail.
Elsewhere, the Australian dollar inched up 0.07% to $0.6595, supported by upbeat central bank commentary, while the New Zealand dollar rose 0.03% to $0.5858. The Chinese yuan also firmed to 7.1136 per dollar, backed by easing US-China trade tensions and Beijing’s decision to keep lending rates unchanged.
