Dollar Steady, Headed for Biggest Weekly Drop in a Month

The dollar moved away from two-week lows on Friday but remained on track for its biggest weekly decline in a month as traders awaited developments in U.S. tariff negotiations ahead of the August 1 deadline and focused on central bank meetings next week.

Both the Federal Reserve and the Bank of Japan are expected to keep interest rates unchanged at their policy meetings next week, but traders are awaiting subsequent comments from policymakers to assess the timing of their next move.

“The Bank of Japan’s monetary policy meeting next week will be closely watched for clues on the timing of the next rate hike,” said Carol Kong, currency strategist at the Commonwealth Bank of Australia, according to Reuters. The yen held steady at 147.20 against the dollar, on track for a weekly gain of nearly 1%, but Japan’s currency was weaker on the day as traders assessed monetary policy expectations and the fate of Prime Minister Shigeru Ishiba, whose ruling coalition failed to win a majority in the upper house in this week’s elections.