Dollar falls against euro and Swiss franc as markets eye Fed speakers
FILE PHOTO: U.S. dollar banknotes are seen in this illustration taken March 19, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
NEW YORK :The U.S. dollar was poised to snap a three-day winning streak against the euro and Swiss franc on Monday, as markets eyed a barrage of comments from Federal Reserve officials about its latest monetary policy stance.
The dollar hovered near levels seen before last week’s decision by the Fed to begin cutting interest rates. The current pricing is consistent with the central bank’s messaging, which highlighted rising concerns over the U.S. labour market as the key driver of policy, analysts said.
“The lack of significant data until Friday’s core Personal Consumption Expenditures (PCE) inflation release leaves investors open to rethinking Fed rate cuts and the plan ahead,” said Bob Savage, head of markets macro strategy at BNY.
St. Louis Federal Reserve President Alberto Musalem said he supported the rate cut at last week's Fed meeting as a precautionary move to protect the job market, but said there may be "limited room" for further reductions given inflation above the Fed's 2 per cent target.
The dollar was last down 0.19 per cent to 0.794 against the Swiss franc, on track to snap three straight sessions of gains.
On Friday, new Fed Governor Stephen Miran defended himself as an independent policymaker after dissenting in favour of a steeper 50-basis-point rate cut, and promised to give a detailed argument for his views in a speech later on Monday.
Analysts suggested that Miran’s lone dissent was a calculated move by the rest of the FOMC to show unity behind Chair Jerome Powell and reinforce the Fed’s institutional independence.
U.S. President Donald Trump criticised the Fed, urging the central bank to cut interest rates more aggressively.
"Today is more of consolidating day," said Marc Chandler, chief market strategist at Bannockburn Forex in New York. "We had a strong dollar bounce after the FOMC meeting that has sort of stalled. I kind of thought we'd get a bit more of dollar gains ahead of the next batch of jobs data. It's a light economic week but what's of interest is that in the FOMC there's such a wide dispersion of views and this week over half the Fed are speaking and the highlight might be (Jerome) Powell tomorrow."
The euro was up 0.23 per cent at $1.1771, poised for snap three consecutive sessions of losses against the dollar.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.24 per cent to 97.49. It is on track to snap three straight sessions of gains.
The Swedish crown rose 0.57 per cent to 9.373 versus the dollar before the central bank policy meeting on Tuesday.
The dollar dropped 0.05 per cent to 147.87 against the Japanese yen, poised for the second straight session of losses.
The Bank of Japan's hawkish shift in rhetoric last week fuelled speculation of a near-term rate hike but failed to support the currency.
Analysts said that political uncertainty ahead of the Liberal Democratic Party leadership election scheduled for October 4 was a factor in the Bank of Japan's caution over further rate hikes.
Sterling rose against the dollar on Monday as investors paused following Friday's selloff driven by fiscal concerns.
The pound was up 0.25 per cent at $1.3499.
The Australian dollar weakened 0.14 per cent to $0.6582.
