Dollar Steady as Yen Hits Seven-Month High Ahead of Fed, BOJ Meetings

The US dollar held steady on Monday as investors waited for key decisions from the Federal Reserve and Bank of Japan. The yen, however, continued its sharp gains, reaching near a seven-month high.

The Fed's decision on Wednesday is expected to be pivotal in determining interest rates. A rate hike has been priced in by 86% of traders, according to the CME FedWatch tool. This follows data from last Friday showing US consumer prices accelerated in August.

Shane Oliver, chief economist and head of investment strategy at AMP, noted that the Fed could decide to wait, but this would be complicated by its October meeting being just ahead of the U.S. midterm elections.

The Bank of England is expected to stand pat on Thursday, with voting likely to be close. The euro was recently at $1.159, while sterling last bought $1.3524.