Investing.com – The U.S. dollar steadied on Monday after falling the previous week on weaker-than-expected nonfarm payrolls data, prompting traders to speed up the timing of a potential Federal Reserve interest rate cut this year.
At 04:31 ET (0831 GMT), the greenback, which tracks the greenback against a basket of six other currencies, was trading 0.04% higher at 105.07.
It fell to a more than three-week low last week, a decline driven by bets that the Fed could now decide to cut rates from more than two-decade highs as early as September. Markets had previously bet that the central bank would deliver an initial 25 basis point rate cut in November.
The surprise payroll data also drew attention to upcoming speeches from some key Fed officials this week. New York Fed President John Williams and Richmond Fed President Thomas Barkin will speak on Monday, followed by Minneapolis Fed President Neel Kashkari a day later. Chicago Fed President Austan Goolsbee and Fed Chairman Michel will also speak later this week.
The euro traded 0.1% higher at $1.0769. Many believe the European Central Bank will implement its own rate cuts in June, although it remains unclear what will happen to monetary policy after the meeting.
Meanwhile, the British pound was trading 0.2% higher at $1.2573. Last week’s data showed the UK’s key services sector remained healthy, possibly giving the Bank of England more room to delay rate cuts.
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Asian currencies were broadly lower after recent gains against the dollar. But the prospect that US borrowing costs will remain high in the short term has seen most regional currencies trade in the red throughout the year.
The Japanese yen rose 0.6% on Monday, although trading volumes for the pair were dampened by a market holiday in Japan, while the Chinese yuan fell 0.4%.
The Singapore dollar rose 0.1% and the Indian rupee rose 0.1%.
Elsewhere in currencies, the Australian dollar rose 0.3%, nearing two-month highs, as traders prepare for a Reserve Bank of Australia meeting on Tuesday. While the RBA is expected to keep rates unchanged, it is also expected to have a hawkish response following stronger-than-expected inflation figures in the first quarter.