The U.S. dollar remained steady against the euro on Monday as investors eagerly awaited further guidance from Federal Reserve officials regarding the future path of U.S. interest rates. This comes after cautious remarks from Federal Reserve officials, despite signs of cooling inflation.
Atlanta Federal Reserve President Raphael Bostic remarked that it will take time for the central bank to be certain that inflation is moving steadily towards its 2% target. "The issue right now is when are we going to be certain that inflation is clearly on a path back to 2%. I think it's going to take a while before we know that for sure," Bostic stated in an interview with Bloomberg Television.
Bostic's comments are part of a broader set of communications from the Federal Reserve, with several other Fed officials scheduled to speak throughout the week. Additionally, the market is keenly focused on the minutes from the Fed's last meeting, which are due for release on Wednesday.
The euro was slightly down, trading at $1.0836 against the dollar, while the dollar strengthened by 0.3% against the yen, reaching 156.15 yen. Last week's data showed that U.S. consumer prices rose less than expected in April, leading markets to price in 50 basis points of Fed rate cuts this year. However, various Fed officials have expressed caution about when rates might start to decline.
Michael Brown, a market analyst at Pepperstone in London, noted the current market sentiment. "I think after CPI passed last week the FX market is rather lacking a catalyst at this stage," he said. "While the FOMC calendar is, again, stupendously busy, it seems there's little fresh information that speakers can add at this stage."
With the euro maintaining proximity to the nearly two-month high of $1.0895 touched last week, it remains up 1.8% in May, buoyed by weaker U.S. growth and inflation data, as well as a pickup in the euro zone economy. Meanwhile, the Japanese yen showed weakness, with traders remaining vigilant for signs of government intervention.
Sterling was relatively flat after touching a two-month high of $1.2711, awaiting a UK inflation report due on Wednesday. The Australian dollar dipped 0.3% to $0.6671, despite strong commodity prices, raising concerns about its near-term outlook.
Bitcoin held steady, trading at $67,027, just shy of the five-week high of $67,712 reached in the previous session.
