The dollar index fell slightly to around 98.8 on Monday, trimming last week’s gains as investors positioned for a pivotal week featuring a highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping and a closely watched Federal Reserve rate decision. Markets are hopeful for a trade breakthrough at Thursday’s Trump-Xi meeting after productive weekend talks between US and Chinese negotiators, who reportedly reached consensus on key issues including export controls, fentanyl, and shipping levies. Trump is also scheduled to meet Japan’s new Prime Minister Sanae Takaichi on Tuesday. Meanwhile, traders have nearly fully priced in a quarter-point rate cut this week following softer inflation data on Friday, though the ongoing government shutdown remains a concern. The dollar weakened most against the Australian and New Zealand dollars amid risk-on sentiment.
