Dollar Holds Steady Amid Central Banks' Rate Decisions
The dollar has maintained its steady position in currency markets as investors await key decisions from major central banks, including the Federal Reserve and the Bank of Japan.
Oil prices above $100 a barrel are adding to inflationary pressure and complicating central banks' decisions, while concerns about fresh sell-offs in long-term bonds are influencing currency movements and government bond yields.
The European Central Bank raised interest rates last week, leaving the door open for further policy tightening. Markets now expect a rate hike from the Federal Reserve on Wednesday, with the Bank of Japan likely to raise rates by 25 basis points on Friday.
Traders have increased their bets on higher borrowing costs following data showing an acceleration in US consumer inflation in August. According to futures markets, the probability of a rate hike stands at 86%.