Dollar Edges Lower as Traders Mull US Rates Outlook
The dollar weakened against most Group-of-10 peers as investors positioned for the start of the Federal Reserve's easing cycle this week.
Bloomberg Dollar Spot Index fell 0.1% in holiday-thinned trading, extending last week's 0.5% decline.
Investors are awaiting a pivotal Fed meeting outcome on Wednesday with markets mulling whether policymakers will cut by 25 or 50 basis points. Decisions from the Bank of England and Bank of Japan are also due this week.
"Any surprises from the Fed could potentially upend the global monetary policy outlook," Bob Savage, head of markets strategy at insights at BNY, wrote in a note. "Fed commentary that casts doubt over steady easing from here could boost the dollar and tighten financial conditions worldwide".
Cash Treasuries trading is closed due to a local holiday in Japan; markets across China, Indonesia, South Korea and Malaysia are also shut for local holidays.
USD/JPY fell 0.3% to 140.52, extending last week's 1% drop.
USD/JPY's implied volatility rose across contract lengths as traders position for key policy decisions this week.
Source: Bloomberg
