Dollar Steady as Investors Ponder Rate Hikes Ahead of Fed and BOJ Meetings

The dollar remained steady on Monday as investors pondered potential rate hikes from the Federal Reserve and Bank of Japan in a pivotal week for monetary policy.

Global policymakers are grappling with erratic pricing pressures from the six-month-long U.S.-Israeli war on Iran, which has pushed oil prices above $100 per barrel and upended the path for rates amid bouts of selloffs in long-end bonds.

The European Central Bank raised rates last week and warned of further hikes, setting the stage for the Fed policy decision on Wednesday and a widely expected rate hike from the BOJ on Friday. The Bank of England is expected to stand pat on Thursday, but voting may be close.

Traders increased bets for a Fed rate hike after data showed U.S. consumer prices accelerated in August; they priced in an 86% chance of an increase this week and another move higher later in the year.