Market Overview
The U.S. dollar edged lower on Monday, with the U.S. Dollar Index slipping 0.1% to 99.80 in Asian trade as of 03:01 ET. The greenback had fallen 1.5% in the prior week after the Federal Reserve held interest rates steady and offered little guidance on its next move.
Geopolitical Context
President Donald Trump announced that fresh U.S–Iran negotiations would resume on Monday, without setting a deadline. The talks are expected to address Iran’s nuclear programme and safe navigation of the Strait of Hormuz following recent disruptions to oil shipments. Trump warned that Washington remains prepared to take stronger action if diplomacy fails. ING analysts noted that lower oil prices, stemming from the diplomatic focus, also weigh on the dollar.
Japanese Yen Rally
The Japanese yen continued its recent gains, with the USD/JPY pair trading 0.5% lower at 156.76 yen after having touched 155.21 earlier in the session. The pair had declined more than 3% over the previous two trading sessions. The yen had previously hit a 40‑year low against the dollar before Japanese authorities intervened last week.
Intervention Signals
U.S. Treasury Secretary Scott Bessent stated that the United States would not hesitate to participate in further joint intervention should disorderly moves in the yen re‑emerge. The Bank of Japan left its policy rate unchanged at 1% on Friday but adopted a hawkish tone, indicating readiness to tighten policy further if inflation evolves in line with its forecasts.
U.S. Economic Data Outlook
ING analysts observed that despite $70‑80 billion of dollars being supplied to the market over the last three days, the broader dollar remains resilient, with upcoming U.S. jobs data likely to influence its trajectory. The week’s calendar includes Tuesday’s JOLTS job‑openings report, Wednesday’s ADP private‑payrolls and ISM services survey, Thursday’s weekly jobless‑claims release, and Friday’s closely watched non‑farm payrolls report. For the day, market participants focus on July ISM manufacturing data.