Dollar slips ahead of Trump–Xi meeting and key central bank decisions
The U.S. dollar weakened on Tuesday as traders awaited major central bank meetings — including the Federal Reserve, Bank of Japan (BOJ), and European Central Bank (ECB) — while keeping a close watch on President Donald Trump’s Asia tour and an upcoming meeting with China’s President Xi Jinping.
The yen strengthened 0.6% to 151.85 per dollar ahead of the BOJ meeting, with investors looking for clues about the timing of Japan’s next rate hike, News.Az reports, citing Reuters.
U.S. Treasury Secretary Scott Bessent’s comments urging “sound monetary policy” also boosted the yen, as he met with Japan’s new Prime Minister Sanae Takaichi in Tokyo.
Markets are eyeing Trump’s summit with Xi in South Korea on Thursday, where investors hope for signs of progress on trade, though analysts warn any deal may be limited.
“With two strong-headed leaders, this won’t be a seamless affair,” said Vasu Menon of OCBC. “Even small progress could keep markets optimistic.”
The euro hit a one-week high at $1.1668, and sterling climbed 0.25% to $1.3368. The dollar index eased to 98.58, extending losses from the previous session.
Markets have priced in a 25-basis-point Fed rate cut this week, with traders also watching for hints about future easing as the U.S. government shutdown limits economic data releases.
Over in Europe, the ECB is expected to hold rates steady, while the Australian and New Zealand dollars edged higher amid improved risk sentiment.
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