NEW YORK: The US dollar was mostly flat against a basket of major currencies on Monday on hesitation to make bets ahead of a speech from the Federal Reserve Chair on Friday, while comments from another top Fed official kept the greenback stable.
Traders were awaiting comments from Fed Chair Janet Yellen at the central bank’s annual meeting in Jackson Hole, Wyoming, while comments perceived as hawkish from Fed Vice Chair Stanley Fischer on Sunday led some to believe that Yellen may also strike a more hawkish tone and signal a rate hike this year.
Fischer said he thought the Fed was close to achieving its employment and inflation targets. Those comments from the Fed’s No. 2 policymaker kept the dollar from falling Monday, but the reluctance to make bullish bets ahead of Yellen’s remarks kept the dollar from rallying.
“Fischer’s comments are kind of setting the table for something similar out of the Fed chair on Friday,” said Stephen Casey, senior foreign exchange trader at Cambridge Global Payments in New York. He added, however, that the dollar would likely trade within a tight range ahead of Yellen’s speech.
The dollar index, which measures the greenback against a basket of six major currencies, was last up just 0.03 percent at 94.539. The index pared gains after rising by as much as 0.3 percent earlier in the session.
The dollar’s stability came after the index fell about 1.3 percent last week on what traders perceived as mixed signals from Fed officials. The euro was last down 0.04 percent against the dollar at $1.1320 after touching a nearly eight-week high against the greenback on Aug. 18 of $1.1365.
The dollar was last up 0.04 percent against the Swiss franc at 0.9613 franc after touching an eight-week low of 0.9532 franc last week.
Federal funds futures on Monday afternoon suggested traders saw a probability of just under 50 percent that the Fed will hike rates this year, according to data from CME Group’s FedWatch program.
“For the most part, everyone’s pretty much waiting for Yellen,” said Mazen Issa, senior currency strategist at TD Securities in New York.
The dollar gained slightly against the yen, partly after the Sankei newspaper reported over the weekend that the Bank of Japan would not rule out deepening a cut to negative rates, quoting Governor Haruhiko Kuroda.
The dollar was last up 0.06 percent against the yen at 100.26 yen