Key facts
- Major currencies traded in tight ranges ahead of a week of central bank decisions.
- The dollar weakened as oil prices and Treasury yields pulled back.
- Five major central banks are expected to announce policy decisions this week.
- Markets are pricing in potential rate hikes from the Bank of Canada and Reserve Bank of New Zealand.
Major currencies traded in tight ranges on Monday as markets looked ahead to a week filled with central bank policy decisions and corporate earnings reports. The US dollar saw some weakness as oil prices and Treasury yields eased.
Brent crude futures fell more than 1% to around $115 a barrel, retreating from a six-month high. This pullback followed reports of Qatari mediators being in Tehran to de-escalate regional tensions in coordination with the US.
US Treasuries largely maintained recent gains, with yields on 10-year notes hovering near one-month lows at 4.974% and 30-year notes at 5.299%. This was partly due to ongoing inflation concerns from elevated oil prices and a rotation out of risk assets amid worries about artificial intelligence.
The euro edged up 0.16% to $1.122 against the dollar, supported by relief that France avoided a Moody's downgrade despite social unrest. Sterling also strengthened 0.1% to $1.3385.
The dollar index, a measure against a basket of major currencies, was slightly weaker at 101.64. The Australian dollar fell 0.04% to $0.7030, while the New Zealand dollar gained 0.06% to $0.572. The Japanese yen remained largely steady against the dollar at 156.920.
This week, the US Federal Reserve, European Central Bank and Bank of Japan are expected to hold interest rates steady. However, markets are anticipating potential rate hikes from the Bank of Canada and the Reserve Bank of New Zealand.
US economic data releases, including consumer confidence, the PCE price index, and jobless claims, are also on the calendar and could offer further insights into the Federal Reserve's policy path.
In other markets, gold prices were slightly lower, trading at $3,986.16 per ounce. Bitcoin fell 0.6% to $79,925.84, and ether was down 1.1% at $2,317.33.