The U.S. dollar stabilized on Monday after two weeks of declines, as traders adopted a cautious stance ahead of the Federal Reserve’s policy decision on Wednesday and a busy week of global central bank meetings. Rate cuts are largely priced in, but divisions within the Fed have heightened concerns over a potential “hawkish cut” — a scenario in which rates are lowered but forward guidance remains restrictive, limiting expectations for further easing in 2025.
In currency markets, the euro held close to $1.1650, while the yen strengthened modestly to around 155.17 per dollar after weeks of weakness in November. Analysts noted that if investors scale back bets on multiple rate cuts next year, a firmer message from the Fed — especially if supported by dissent within the Federal Open Market Committee — could lend renewed support to the dollar.
The Australian dollar hovered just below recent highs ahead of the Reserve Bank of Australia’s meeting on Tuesday, with policymakers widely expected to keep interest rates unchanged at 3.60% due to strong inflation and growth data. The Canadian dollar retreated to around 1.3822 per U.S. dollar after hitting a ten-week high on upbeat employment figures, while the New Zealand dollar traded near $0.5780. The Swiss franc edged higher, sterling stayed above $1.33, and the Chinese yuan remained stable around 7.07 as traders awaited broader policy signals.