Investing.com - The U.S. dollar pushed higher against a currency basket on Monday, buoyed by expectations for trade talks that investors hope will ease tensions between the U.S. and China.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, edged up 0.1% to 96.11 by 03:41 AM ET (07:41 AM GMT) after falling 0.5% on Friday, the largest one day decline in almost a month.
Mounting tensions between the U.S. and its trading partners, along with a currency crisis in Turkey propelled the dollar to 14-month highs late last week.
The dollar’s rally stalled ahead of expected trade talks between Chinese and U.S. officials in Washington in the coming days. Ebbing concerns over the fallout from the Turkish lira’s recent selloff also eased risk aversion, dampening dollar demand.
Sentiment toward Turkey stabilized Monday, with the lira holding steady around the 6 lira to the dollar level. Turkish financial markets were to remain closed for holidays for the week.
The euro slid against the firmer dollar, with EUR/USD down 0.18% to 1.1416, still well above last Wednesday’s 13-month trough of 1.1300.
The dollar was a touch higher against the yen, with USD/JPY rising 0.13% to 110.64 after shedding 0.36% on Friday.
Investors were looking ahead to Wednesday’s minutes of the Federal Reserve’s August meeting, when it left interest rates unchanged and indicated that it remains on track for additional rate hikes this year.
Investors will be on the lookout for any tweaks to the Fed’s outlook on inflation, the economy and trade war fears.
On Friday, Jerome Powell is to make his first appearance as Fed chairman at the annual economic symposium in Jackson Hole. The conference will be closely scrutinized for clues to the monetary policy direction of some of the world’s most important central banks.