Dollar gains as Trump hosts Ukraine talks
The dollar gained on Monday as U.S. President Donald Trump hosted talks on ending Russia's war in Ukraine, and traders pared bets on a September rate cut before a speech on Friday by Federal Reserve Chair Jerome Powell.
Trump met with Ukrainian President Volodymyr Zelenskiy on Monday before holding talks with the leaders of Britain, Germany, France, Italy, Finland, the European Union and NATO.
Trump said that the United States would "help out" Europe in providing security for Ukraine as part of any deal to end the war in Ukraine and expressed hope that Monday's summit could eventually lead to a trilateral meeting with Russian President Vladimir Putin, adding that he believes Putin wants the war to end.
Traders are also focused on Powell’s appearance later this week at the U.S. central bank’s annual economic policy symposium in Jackson Hole, Wyoming, for any new indications on whether a rate cut is likely next month.
Powell has said he is reluctant to cut rates on expectations that Trump’s tariff policies will lead to higher inflation this summer.
Traders pared bets on a cut at the Fed’s September 16-17 meeting after producer price inflation was hotter than expected in July. They had ramped up bets on a cut after consumer price inflation data for last month showed limited pass through from the trade levies.
Fed fund futures traders are now pricing in a 83% probability of a September rate cut, after last week briefly fully pricing in a move.
Powell is unlikely to lock himself into a monetary path before seeing August’s round of data.
A gauge of U.S. homebuilder sentiment fell unexpectedly in August, slipping back to its lowest level in more than two-and-a-half years, data on Monday showed.
The euro was last down 0.31% on the day at $1.1661. Against the Japanese yen , the dollar strengthened 0.41% to 147.79.
Sterling weakened 0.35% to $1.3504.
In cryptocurrencies, bitcoin fell 0.95% to $116,598.
Source : Reuters
