The dollar index steadied around the 101 mark on Monday as traders avoided making big bets ahead of the US Federal Reserve’s key policy decision this week. The Fed is widely expected to raise interest rates by 25 basis points on Wednesday, while traders will listen closely to Fed Chair Jerome Powell’s comments after the meeting for clues on the central bank’s next steps. Meanwhile, investors have been scaling back bets of further policy tightening after July, with market pricing suggesting possible rate cuts next year amid easing US inflation. Markets also look ahead to the Fed-preferred PCE inflation gauge and advance estimate of Q2 GDP growth in the US this week. Elsewhere, the European Central Bank and the Bank of Japan are set to decide on monetary policy this week as well.
