Major currencies moved within narrow ranges on Monday as a busy week of central bank decisions and company earnings began. Lower oil prices and Treasury yields put pressure on the dollar. The dollar index, which tracks the US currency against a basket of other currencies, edged lower to 101.64.
Five major central banks will announce decisions later in the week. The US Federal Reserve, European Central Bank and Bank of Japan are expected to leave rates unchanged. Markets are pricing in possible increases from the Bank of Canada and Reserve Bank of New Zealand. Pepperstone research head Chris Weston said guidance about future policy could matter more than the decisions themselves. Weston said the decisions may already be largely reflected in market prices. Weston said policymakers could move short-term rates by shaping expectations for subsequent meetings and prompting markets to reprice the forward rates curve.
Brent crude futures fell more than 1% to around $115 a barrel after reaching a six-month high last week. The decline followed news that Qatari mediators visited Tehran on Sunday for efforts coordinated with the US to ease regional tensions. US Treasuries retained most of the gains from a recent safe-haven rally. High oil prices sustained inflation concerns, while a technology-led selloff driven by worries about AI encouraged investors to move away from risk assets. The yield on 10-year US Treasury notes fell to 4.974%. The yield on 30-year notes stood at 5.299%, close to one-month lows.
National Australia Bank FX strategy head Ray Attrill said the US bond market appeared to be directing broader dollar performance for now. Attrill said falling Treasury yields and narrowing yield differences between the US and other major G10 economies had eased support for the dollar.
The euro gained 0.16% to $1.122, supported by relief that Moody's did not downgrade France despite social unrest. Sterling rose 0.1% to $1.3385. The Australian dollar slipped 0.04% to $0.7030. The New Zealand dollar gained 0.06% to $0.572. The Japanese yen remained broadly unchanged at 156.920 per dollar.
The US economic calendar includes October consumer confidence, the PCE price index and jobless claims. The releases could offer further indications about the Fed policy outlook. Spot gold edged lower to $3,986.16 per ounce. Bitcoin fell 0.6% to $79,925.84. Ether declined 1.1% to $2,317.33.
Currency Markets Subdued Ahead of Key Central Bank Decisions
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Summary
The fear and greed index remained neutral as major currencies traded in tight ranges ahead of key central bank decisions. The dollar index dipped to 101.64 with falling oil and Treasury yields. Five central banks, including the Fed and ECB, are expected to hold interest rates steady this week, while Canada and New Zealand may hike. Forward guidance could shape market moves more than the actual decisions. Brent crude dropped 1% to $115, and 10-year yields hit 4.974%. Bitcoin fell 0.6% to $79,925.84.
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