Ammon News - The dollar held steady on Monday, as investors warmed to the idea that U.S. inflation may have slowed enough for the Federal Reserve to cut rates in 2024, while the euro was calm ahead of an expected cut from the European Central Bank this week.

Among emerging market currencies, the Indian rupee and Mexican peso strengthened following exit poll results from general elections in both countries.

The Indian rupee, the best performing Asian currency this year, was last at 83.035 per dollar as exit polls pointed to a sizable mandate and rare third term for Prime Minister Narendra Modi.

The Mexican peso weakened on Monday after the ruling party declared Claudia Sheinbaum the winner of the presidential election by a "large margin" after polls closed on Sunday.

The dollar posted its first monthly decline of the year in May, weighed down by shifting expectations on when the U.S. central bank will cut rates and by how much, with markets pricing in 37 basis points of cuts this year from the Fed.

Data on Friday showed a measure of consumer inflation staged a modest rise in April and price pressures remained above the central bank's 2% target.

Traders are pricing in about a 60% chance of a September rate cut, versus 49% before the report.

The dollar index, which measures the U.S. currency against six others , was up 0.1% at 104.67. The index fell 1.56% in May but is up 3% for the year.

Sterling fell 0.2% to $1.27215, while the euro was a touch lower at $1.0844 ahead of the ECB policy meeting on Thursday when the central bank is seen as almost certain to cut rates.

Reuters