Dollar Erases Gain as Fed-Cut Prospects Outweigh Haven Demand

The dollar erased an advance on Monday after the Federal Reserve’s Michelle Bowman said she could support reducing interest rates as soon as July, overshadowing mounting tensions in the Middle East.

The remarks by Vice Chair for Supervision Bowman echoed comments by Fed Governor Christopher Waller on Friday, and they raised the prospect that lower borrowing costs could dim the dollar’s relative allure. As a result, the greenback gave up an earlier gain triggered by the US’s move to bomb nuclear sites in Iran over the weekend, as the conflict between Iran and Israel showed signs of boiling over.