Story
US Dollar Stabilizes After Worst Session Since April as Fed Policy Looms
Summary
The U.S. dollar held steady on Monday, following its largest single-day drop since late April, as investors await further signals on monetary policy from the Federal Reserve. The Japanese yen remained near a 40-year low, raising concerns about potential government intervention.
The U.S. dollar was little changed in Monday trading, stabilizing after its worst session since the end of April last Thursday. The U.S. dollar index, which measures the currency against a basket of six major peers, hovered near the 100.85 mark as market participants remained focused on the outlook for U.S. monetary policy.
The dollar's sharp decline last week followed a softer-than-expected June nonfarm payrolls report. The data suggested a resilient but not overly strong labor market, which could give the Federal Reserve more flexibility to keep interest rates on hold. Investors are now looking ahead to the release of the Fed's June meeting minutes on Wednesday for further insight into policymakers' thinking.
In Europe, the euro was mostly flat against the dollar following the release of new economic data. Eurozone industrial producer prices rose 5.9% year-over-year in May, while retail sales saw a modest 0.2% increase for the month. With regional inflation expected to fall, the case for another rate hike by the European Central Bank appears less certain.
AdMeanwhile, the Japanese yen weakened, with the USD/JPY pair trading around 162.04. The yen has been languishing at a 40-year low, a level that has previously prompted intervention by Japanese authorities. Despite a rate hike by the Bank of Japan in June, the currency has struggled to strengthen, and officials have issued verbal warnings against speculation.