The USD opened a new trading week in a slight downward trend, as global investors turned their attention to a series of important monetary policy meetings - the focus being the US Federal Reserve (Fed).
The market has almost assessed the possibility of the Fed cutting interest rates, but the internal divide of the Open Market Committee (FOMC) makes the upcoming decision considered a big unknown for the year.
Along with the Fed, the central banks of Australia, Brazil, Canada and Switzerland will also meet this week. However, analysts say that no place is expected to change interest rates, except in the US.
According to market data, the Euro has fluctuated in a narrow range since June, increasing slightly to 1.1663 USD, while the Japanese Yen recovered slightly to 155.21 Yen/USD after a strong price decline in November.
Experts predict that the Fed may carry out a "Havy-shenced cut", which means cutting interest rates but still keep a strong tone in the announcement and speech of Chairman Jerome Powell.
If the Fed hinted that the new interest rate ceiling would be maintained for longer, it could support the USD, as investors are forced to reduce expectations for the number of cuts in 2026.
However, the Fed's message is not expected to be easy to convey, due to disagreements within the FOMC. Since 1990, there have been only nine meetings recording three or more members in disagreement, the last of which was in 2019. This shows that the risk of differentiation in voting is increasing.
Meanwhile, in Australia, the Australian dollar (AUD) rose to a two-and-a-half-month high of $0.6610.662.
This increase was driven by expectations that the Reserve Bank of Australia (RBA) will keep interest rates unchanged at 3.6% for a long time, instead of cutting early as previously forecast. ANZ experts said that after a series of positive data on inflation, growth and household spending, the possibility of a new interest rate increase may appear as early as May 2026.
In Canada, a similar trend occurred as the Canadian dollar (also Loonie) rose to a 10-week high after a strong jobs report.
The Bank of Canada is expected to keep interest rates unchanged this week, but the market has fully priced in the possibility of raising interest rates by the end of 2026. The Loonie opened at the beginning of the week steadily at 1.3819 CAD/USD.
In the Atlantic region, the New Zealand dollar is moving sideways around $0.5784, just slightly below the resistance level of $0.58. Meanwhile, the Swiss French market increased by about 0.1% to 0.8034 USD/ franc. With inflation at a low level, the Swiss National Bank (SNB) is forecast to continue to maintain the 0% interest rate in the coming time.
The British pound is trading around $1.3339, slightly above the 200-day moving average, while the Chinese yuan is holding steady at $7.068 yuan/USD.
In Brazil, where the key interest rate remains at 15%, the market is almost certain that the central bank will not act in this session. However, the possibility of a rate cut in the coming quarter is considered a reasonable scenario, as the largest economy in South America gradually cools down after a long tightening cycle.
Amid a dense global picture of policy meetings, investors are still looking for clearer signals on the direction of interest rates in 2026.
And while the US dollar is taking a slight backward, the global monetary balance still depends on the Fed's steering wheel this week, a turning point that could shape exchange rate trends throughout next year.
