SINGAPORE: The dollar held firm on Monday as investors awaited a pivotal meeting between US President Donald Trump and Ukrainian leader Volodymyr Zelenskiy, while attention also turned to the Federal Reserve’s annual Jackson Hole gathering for signals on the policy outlook.
Currency trading was muted in early Asia hours, with the dollar stabilising after last week’s decline as markets trimmed expectations of a steep Fed rate cut next month.
The euro was little moved at US$1.1705, while sterling edged up 0.07 per cent to US$1.3557. Against a basket of currencies, the greenback inched up to 97.85, after shedding 0.4 per cent last week.
Markets are now assigning an 84 per cent chance of a quarter-point rate cut in September, down from 98 per cent previously. A run of stronger-than-expected data, including a surge in wholesale prices and resilient July retail sales, reduced the likelihood of a larger 50-basis-point move.
“While the data are somewhat mixed, the US economy still appears to be in decent shape in the third quarter,” said Bill Adams, chief economist at Comerica Bank. “We expect the Fed to lower rates by year-end, whether in September, as markets anticipate, or later in the year.”
The spotlight on Monday is on Trump’s meeting with Zelenskiy, alongside European leaders, as Washington pushes Kyiv toward a swift peace settlement in Europe’s deadliest conflict in eight decades. Trump is urging a deal after recent talks with Russian President Vladimir Putin in Alaska, where he signalled greater alignment with Moscow’s preference for a negotiated settlement over a ceasefire.
Later this week, investors will focus on the Kansas City Fed’s Jackson Hole symposium (Aug 21–23), where Fed Chair Jerome Powell will outline the central bank’s policy framework and economic outlook.
“Markets will be watching Powell closely,” said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia. “Given how strongly a September cut is priced in, even a balanced assessment of the economy could be seen as hawkish.”
In other moves, the dollar rose 0.11 per cent to 147.34 yen, recovering from last week’s 0.4 per cent slide. Japan’s government on Friday brushed off pointed criticism from US Treasury Secretary Scott Bessent, who said the Bank of Japan was “behind the curve” in policy—remarks widely seen as pressure to raise rates.
The Australian dollar edged 0.1 per cent higher to US$0.65145, while the New Zealand dollar climbed 0.15 per cent to US$0.5934, following a 0.5 per cent fall last week.
