The U.S. dollar lost momentum on Monday, breaking a three-day winning streak against the euro and Swiss franc. The move came as investors parsed multiple speeches from Federal Reserve officials that highlighted concerns over the labor market and ongoing debates around the pace of rate cuts.
The greenback retreated 0.38% versus the Swiss franc and slipped against the yen, while the euro climbed 0.44% to $1.1796 after several sessions of declines. The dollar index, which tracks the currency against a basket of major peers, dropped 0.39% to 97.34.
Markets remain cautious ahead of Friday’s core PCE inflation release, a key indicator for the Fed’s policy outlook. Analysts noted that, with limited fresh economic data this week, traders are focused on the wave of Fed speeches — including Chair Jerome Powell’s address in Rhode Island.
Fed Governor Stephen Miran, who dissented at the last meeting, reiterated his view that a larger rate cut was needed, while St. Louis Fed President Alberto Musalem supported the quarter-point cut but signaled “limited room” for further easing due to inflation pressures.
Global currency movements added to volatility: the Swedish crown jumped 0.75% ahead of a central bank decision, while sterling and the Australian dollar also gained modestly against the dollar. Meanwhile, the yen’s trajectory remains uncertain, as the Bank of Japan balances hawkish signals with political risks tied to the upcoming LDP leadership election.
Overall, FX markets appear set for a quieter week, with direction hinging on Powell’s remarks and upcoming U.S. inflation data.
