The U.S. dollar held steady on Tuesday, hovering around its three-month peak as the market digested signals from a divided Federal Reserve. The central bank's mixed messages caused traders to reassess the likelihood of upcoming interest rate cuts. Meanwhile, investors awaited the Australian central bank's decision, with expectations that it will maintain its current rates.

In currency markets, the yen weakened to 154.38 per U.S. dollar, nearing an eight-and-a-half-month low last seen the previous week. This drop sparked concerns in Tokyo about potential market interventions. Last week's rate cut by the Fed, hinted by Chair Jerome Powell to be the year's last, has reshaped traders' expectations. The probability of another cut has decreased from 94% to 65%, according to CME FedWatch data, s

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