Dollar Loses Steam, Market Awaits Fed Signals
The US dollar index (DXY) lost momentum on Monday (June 29th) and hovered around 101.10. Despite the weakening, the dollar remained near its latest high as investors took profits ahead of the release of US employment data this week.
The US dollar continued to receive support from robust US economic activity, stable high government bond yields, and expectations that the Federal Reserve would maintain its tight monetary policy for longer. This has kept pressure on other major currencies unabated.
EUR/USD recovered to around 1.1420 after market participants weighed mixed eurozone sentiment data and comments by European Central Bank President Christine Lagarde at the ECB Forum on Central Banking 2026. Lagarde warned that Europe remains at risk of pressures that could push inflation away from its target, but the region's economic resilience provides room for the ECB to raise interest rates without creating significant stress on the financial system.
GBP/USD also edged higher to around 1.3260 as the US dollar weakened. However, the pound's gains remained limited as investors awaited the latest economic data from the UK and remained cautious about global risk sentiment. Meanwhile, USD/JPY held high around 161.90 as the yen remained pressured by the wide policy divergence between the Fed and the Bank of Japan.
Meanwhile, AUD/USD weakened to around 0.6890 ahead of the release of the Reserve Bank of Australia's meeting minutes on Tuesday. The market will be looking for clues regarding inflation concerns and the likelihood of further tightening from the Australian central bank. Furthermore, China's manufacturing and non-manufacturing PMI data will also be of interest as they could influence the direction of the Australian dollar. (arl)
Source: newsmaker.id
