Dollar Steady as Central Banks Prepare for Pivotal Meetings

The US dollar held steady on Monday as investors awaited pivotal meetings from major central banks. The Federal Reserve and Bank of Japan are set to make decisions this week that will impact monetary policy.

The yen, however, rose near a seven-month high, with speculators turning to a net long position for the first time since February. Market sentiment has shifted towards a faster pace of rate hikes from the BOJ, leading to expectations of repatriation and asset allocation changes by domestic investors.

Central banks in major economies are expected to raise rates, but concerns around Fed policy credibility linger. Traders have priced in an 86% chance of an increase this week, with a widely expected rate hike from the BOJ on Friday.