The US Dollar stabilized near its lowest levels since early 2022 as investors adopted a wait-and-see approach ahead of a pivotal week for monetary policy.
With the Federal Reserve’s rate decision due on Wednesday, markets could remain cautious.
Yields rose across the curve, with the US 10-year Treasury yield climbing above 4.4%, as investors repriced monetary policy risks.
The Fed is widely expected to hold rates steady, but traders will scrutinize the updated projections and Chair Powell’s tone for clues on whether the central bank could turn more dovish later this year.
Meanwhile, geopolitical tensions remain a key short-term risk factor for the greenback. Escalating hostilities between Israel and Iran have driven demand for safe-haven assets and could fuel some volatility and risk aversion.
Looking forward, with retail sales and jobless claims data due this week, forex traders could remain cautious ahead of the FOMC decision.
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