The US dollar (USD) has been trading in a narrow range since last week, driven by a slowdown in year-end trading, as market players look to the Federal Reserve (Fed) minutes as a guide to the central bank's policy direction through 2026.
At 9.50am, the US Dollar Index (DXY) was steady at 98.235, little changed since early Wednesday trading in Asia.
Financial market activity is expected to remain subdued as most investors are still on holiday until the New Year.
Meanwhile, investors are eyeing the release of the Fed's December policy meeting minutes, which are expected to provide a clearer picture of the discussions following the central bank's decision to cut interest rates earlier this month.
Market participants expect the minutes to reveal differences in views among policymakers on interest rates and the extent of further easing, especially as inflationary pressures continue to ease.
Expectations that the Federal Reserve will implement additional interest rate cuts in 2026 have remained a key driver of currency markets in recent weeks.
Traders have factored in the possibility of several rate cuts next year, a development that has weighed on the dollar and supported emerging Asian currencies.
However, uncertainty over the timing and scale of monetary easing continues to drive caution among investors, limiting more pronounced market moves.
