Dollar eases as traders await Fed interest rate decision
The dollar eased across the board on Monday as investors braced for the Federal Reserve to resume interest rate cuts at this week's meeting and President Donald Trump renewed calls for faster monetary policy easing.
Trump on Monday called for Fed Chair Jerome Powell to enact a "bigger" cut, opens new tab to benchmark interest rates and pointed to the housing market in a social media post ahead of the U.S. central bank's meeting this week.
Traders are fully pricing in a 25 basis point cut at the Federal Open Market Committee meeting on September 16 and 17, and around a 5.8% chance of a 50 basis point cut, according to the CME FedWatch Tool.
"What we see is just a broad-based lack of conviction, with traders relatively happy to sit on the sidelines and wait until the outcome of Wednesday's FOMC meeting is known," Michael Brown, market analyst at online broker Pepperstone in London, said.
"In the meantime, it's likely just positions being squared up to drive things for the next day or so," Brown said.
The dollar index (.DXY), opens new tab, which measures the buck's strength against a basket of six peers, slipped 0.4% to a six-day low of 97.296, before paring losses to trade down 0.2% at 97.445.
Against the Japanese yen, the dollar was 0.3% lower at 147.258 yen, while the euro advanced 0.2% to $1.1759.
The U.S. dollar has steadied since a record slide earlier this year, but many currency market players still view the greenback as locked in a bearish trend.
Data shows that speculative net long positions on the euro against the U.S. dollar continue to hold strong, ticking up to $18.4 billion as of the week ended September 8, near a two-year peak.
The euro's resilience is underpinned by expectations of Federal Reserve policy easing alongside diminishing prospects for further European Central Bank rate cuts.
Sterling was 0.3% higher at $1.359 on Monday, its strongest since early July.
Cryptocurrency bitcoin was down 1% at $114,735, slipping for a third straight session.
Source: Reuters
