The Dollar inched higher on Monday as investors anticipated a series of speeches from Federal Reserve officials this week, which may offer more insight into the outlook for US interest rates following last week’s restart of the central bank’s easing cycle.
The currency remained close to the levels seen before the Fed’s recent decision. Analysts noted that current market pricing aligns with the Fed’s messaging, which underscored growing concerns about the labour market as a primary factor influencing policy.
Last week’s US economic figures revealed a decline in new unemployment benefit claims, offsetting the increase seen the previous week, Reuters reports.
With no major economic data expected until Friday’s core Personal Consumption Expenditures (PCE) inflation report, investors may reconsider the timing of Fed rate cuts and adjust their strategies accordingly.
Fed officials will take centre stage, with more than 18 speaking engagements scheduled.
New Fed Governor Stephen Miran defended his independence on Friday after voting for a larger 50-basis-point rate cut, and said he would present a detailed explanation of his position in a speech on Monday.
Analysts noted that Miran’s solo dissent may have been a deliberate gesture by the rest of the FOMC to demonstrate unity behind Chair Powell and underscore the Fed’s institutional independence.
US President Donald Trump criticised the Fed, calling for more aggressive interest rate cuts. The Dollar dipped slightly following last week’s rebound, when the Fed indicated little immediate need to ease policy. It was trading at 97.66, up 0.05% against a basket of currencies at the time of writing.
Meanwhile, the Euro remained steady at $1.1748.
In addition, the Swedish Krona declined 0.10% to 9.4140 against the Dollar ahead of the central bank’s policy meeting on Tuesday. If implemented, this is expected to be the Riksbank’s last rate cut of the current cycle.
Elsewhere, the Japanese Yen fell 0.10% to 148.06 per Dollar, erasing some of last week’s gains, after the Bank of Japan’s more hawkish tone sparked speculation of an imminent rate hike.
Moreover, the Pound dropped to a two-week low of $1.3453, weighed down by domestic pressures following a rise in UK public borrowing and a Bank of England rate decision that highlighted the difficulty policymakers face in managing growth and inflation.