Dollar tentative as Fed pause eyed in busy c.bank week

The dollar steadied marginally on Monday but remained near multi-week lows against some major currencies as traders stayed on guard ahead of monetary policy decisions due this week from several central banks, including the Federal Reserve.

The U.S. currency was pinned near a one-month low against the British pound and the Aussie at $1.2568 and $0.6740, respectively, with a holiday in most of Australia making for thinned trade.

Policy meetings of the Fed, the European Central Bank (ECB) and the Bank of Japan (BOJ) will set the tone for the week, as markets seek clues from policymakers on the future path of interest rates.

U.S. May inflation data is also out on Tuesday as the Fed kicks off its two-day meeting.

“Any USD move should remain restrained and recent ranges should still hold ahead of FOMC,” said Christopher Wong, currency strategist at OCBC. “Perhaps a softer (inflation) print can negate USD’s bullish pressure.”

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