The U.S. dollar traded steady Monday as investors assessed rising geopolitical uncertainty and focused on negotiations surrounding a critical global shipping route.
Currency markets remained cautious amid thin holiday liquidity, with traders closely monitoring potential diplomatic progress and its implications for global risk sentiment.
The euro hovered near $1.15, while sterling held above $1.32, as the dollar index edged slightly lower in subdued trading conditions.
The Japanese yen weakened toward the key 160 per dollar level, raising concerns about possible intervention from Tokyo authorities.
Analysts noted that repeated policy signals are increasing uncertainty, reinforcing expectations of prolonged market disruption and sustained volatility.
Reports of ongoing negotiations have fueled cautious optimism, with investors weighing the likelihood of a short-term stabilization scenario.
Energy markets remain a central driver, as elevated oil prices continue to shape inflation expectations and global interest rate outlooks.
Traders have adjusted monetary policy expectations, now projecting delayed easing cycles, while safe-haven demand continues to support the dollar.
