The dollar was steady against its peers on Monday, sticking to a tight range as market participants awaited key central bank meetings this week that could set the near-term course for currencies. Central banks in focus include the Bank of Japan, which ends a two-day meeting on Tuesday, and the Federal Reserve, which concludes its policy meeting on Wednesday. The Bank of England also makes a policy decision on Thursday. The dollar index against a basket of six major currencies stood little changed at 94.720, after dipping slightly on Friday. Upbeat second quarter U.S. gross domestic product data failed to lift the greenback, as markets had mostly priced in strong figures. The U.S. currency was 0.01 percent higher at 111.125 yen following a loss of about 0.2 percent on Friday. Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo, said investors will be more interested in U.S. GDP data that incorporates July, which is when tariffs against Chinese goods were activated. "On the other hand, the two-year Treasury yield is rising, underscoring strong rate hike expectations in the market. This is limiting the dollar's losses, although movements are likely to be limited ahead of the BOJ meeting," Yamamoto said. The two-year Treasury yield rose to a decade-high of 2.69 percent towards the end of last week. The financial markets are keen to see whether the BOJ is considering taking steps to make its massive stimulus program more sustainable. Speculation on what the BOJ might do includes possibly adjusting its yield-curve control and exchange-traded fund buying schemes. The dollar has eased back from a six-month high above 113.00 yen scaled on July 19 amid such speculation. "While various speculations are being made over the BOJ, we believe they will stand pat on monetary policy. The focal point for us is whether the BOJ hints at future policy change," said Shin Kadota, senior strategist at Barclays in Tokyo. "But it's difficult to guess what the BOJ will do," he said. "Opinion about potential actions on Tuesday varies greatly, and the meeting could trigger a market reaction no matter what the outcome is." The euro was flat at $1.1652, after gaining modestly on Friday. The pound dipped 0.05 percent to $1.3102. Sterling posted its third straight weekly loss last week, hit by concerns about the progress of Brexit talks. It will be looking for some relief on Thursday, when the BoE is widely expected to raise interest rates for only the second time since the 2008 financial crisis. The Australian dollar declined 0.15 percent to $0.7393, trimming some of its gains after rising roughly 0.4 percent on Friday against a broadly sagging dollar. Source: Reuters
