Fundamental Comment

Dollar stabilizes near one-week high, major central banks eyed

Dollar stabilizes near one week high, major central banks eyed

The U.S. dollar stabilized close to one-week high on Monday as investors are preparing for major central bank's decisions starting with the European Central Bank meeting on Thursday, followed by the Bank of Japan and the Federal Reserve next week.

Expectations of a 50-basis Fed interest rate cut rose last week after a cautious speech from New York Fed President John Williams, but investors softened expectations to a 25-basis point reduction after a Fed spokesman made it clear that the remarks made no reference to possible policy actions at the next Fed meeting.

The U.S. dollar index, which measures the U.S. currency against a basket of other currencies, rose 0.1% to 96.917, as of 13:02 GMT.

The euro stabilized against the dollar at $1.1219, with many investors will closely watch this week’s ECB decision amidst predications that Mario Draghi will take all necessary monetary steps to boost the eurozone economy.

The Japanese yen was 0.19 percent versus the U.S. dollar at 107.91 yen, ahead of Japanese manufacturing data due on Wednesday.

The pound dipped 0.21 percent against the greenback to 1.2473 as concerns about a possible no-deal Brexit continued, where the pound traded near a 27-month trough against the dollar last week before recovering slightly on Friday.

Expectations of an aggressive rate cut by the Fed fell after the Wall Street Journal reported that the Fed was likely to borrowing cost by 25 basis points, and cut rate further in the future in the light of global growth slowdown and trade uncertainty.

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