Dollar steady as week of key central bank decisions kicks off
Federal Reserve, the Bank of England and the Bank of Japan.
Currency moves were largely muted on Monday as investors were hesitant to make big directional wagers ahead of the week's slew of central bank interest rate decisions.
«The plethora of event risk and central bank meetings coming up is keeping a lid on volatility, and with traders really not wanting to chase moves or take on significant risk before the FOMC, BoE, BoJ, etc.,» Michael Brown, market analyst at Trader X, said.
The U.S. dollar index — which measures the currency against six major counterparts — was about flat at 105.25, not far from the six-month high of 105.43 touched on Thursday.
The index rose for its ninth straight week last week, its longest winning streak in nearly a decade.
Resilient U.S. growth has fueled a rebound in the dollar in recent weeks though the rally will likely be tested by a gauntlet of data and Wednesday's Federal Reserve interest rate decision.
«The Fed should stay on hold in terms of rates, and personally I don't anticipate too much of a significant shift in terms of the statement, with a data-dependent tightening bias maintained,» Brown said.
«The balance of risks does tilt a little to the dovish side in terms of the dots, given recent rhetoric, though this shouldn't significantly dent the dollar's longer-run bullish trend given the FX market's apparent focus on relative growth dynamics, where the U.S.
