Investing.com - The U.S. dollar traded in a steady fashion Monday, at the start of a new week that is set to provide more clues over the future path of U.S. interest rates.
At 04:10 ET (08:10 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded marginally higher at 104.355, marginally above a five-week low seen earlier this week.
Dollar steadies ahead of Fed minutes, more speakers
The dollar was hit last week after a slowdown in U.S. inflation lifted the likelihood of interest rates cut by the Federal Reserve this year.
There was something of a recovery as several Fed officials, specifically members of the bank’s rate-setting committee, said that they needed much more confidence that inflation was coming down, beyond some easing inflation in April.
This brings the minutes of the Fed meeting at the start of this month, due on Wednesday, firmly into focus, as traders look for more clues as to when the U.S. central bank will start cutting interest rates.
Several Fed officials are also due to speak during the week, including Atlanta Fed President Raphael Bostic, Governors Michael Barr, Christopher Waller and Philip Jefferson, Cleveland Fed President Loretta Mester, New York Fed President John Williams and Richmond Fed President Thomas Barkin.
Euro calm ahead of PMIs
In Europe, EUR/USD traded 0.1% higher to 1.0874, just below the near two-month high of 1.0895 reached last week.
The eurozone, as well as the U.K., is set to release May PMI data this week, and should emphasise that a slow euro area recovery appears to be underway after six straight quarters of stagnant or negative growth.
The European Central Bank is widely expected to cut interest rates in June, but traders remain unsure of how many more cuts, if any, the central bank will agree to over the course of the rest of the year.
GBP/USD fell 0.1% to 1.2696, with attention on the April U.K. CPI data on Wednesday with economists expecting the annual rate of inflation to have slowed dramatically to near the 2% level targeted by the Bank of England.
The BoE meeting next meets on June 20 and evidence of a sustained cooling of price pressures could provide the push for officials to agree to cut interest rates.
Yuan slips after PBOC keeps benchmark rate unchanged
In Asia, USD/CNY traded 0.1% higher at 7.2315, after the People’s Bank kept its benchmark loan prime rate unchanged at record lows.
While sentiment towards China improved over the past week amid more stimulus and policy support from Beijing, the yuan saw little strength as increased stimulus in the country pointed to more downward pressure on the currency.
USD/JPY rose 0.1% to 155.72, with traders remaining cautious over taking the pair past the 156 level, amid some concerns that it could attract more intervention by the government.