The dollar was mixed on Monday before a week heavy with speeches by Federal Reserve officials that will be watched for further clues on interest rate policy and as investors monitored developments in the Middle East.
Traders are evaluating whether the U.S. central bank may hike interest rates again as it battles to bring inflation closer to its 2% annual target.
Fed Chairman Jerome Powell will speak on Thursday, during a busy week of speeches by regional bank heads. Fed officials will enter into a blackout period on Oct. 21 before the Fed's Oct. 31–Nov. 1 meeting.
Chicago Fed President Austan Goolsbee said it is "undeniable" that the slowdown in U.S. inflation is a trend rather than a momentary blip, despite a recent string of economic data showing persistent pressure on some prices.
Philadelphia Fed President Patrick Harker said on Monday the current level of interest rates has nearly killed off access to the housing market for those looking to get in for the first time.
Fed funds futures traders are pricing in a 33% chance of an additional interest rate hike this year, according to the CME Group's FedWatch Tool.
The dollar index fell 0.29% to 106.23. It reached 107.34 on Oct. 3, the highest since November 2022.
Bank of America analysts Athanasios Vamvakidis and Michalis Rousakis noted last week that investors have appeared skeptical of the greenback in recent weeks, and have been selling rallies in the currency.
The euro gained 0.40% to $1.0554. It fell to $1.0448 on Oct. 3, the lowest since December 2022.
Traders also remain focused on the Japanese yen for potential intervention in the currency.
The dollar was flat against the currency at 149.55, close to the sensitive 150 level. Some traders see an increased potential for Japanese authorities to intervene to support the currency if it weakens past that level.
The yen reached 150.17 on Oct. 3, the weakest in a year, before a brief sharp rally.
On Friday, Japan's top currency diplomat Masato Kanda said authorities will take appropriate action against a backdrop of excessive moves in the yen when needed, adding interest rates are merely one factor in determining exchange rates.
Source : Reuters
