Market News

By Jaspreet Kalra and Rae Wee

SINGAPORE (Reuters) -The dollar gained against the euro and sterling on Monday ahead of a meeting between U.S. President Donald Trump and his Ukrainian and European counterparts, while focus also turned to the Federal Reserve's Jackson Hole symposium for policy cues.

The euro was down 0.2% against the dollar at $1.1683 while the British pound slipped 0.1% to $1.3546.

The paring of wagers on a rate cut by the Fed next month helped the dollar find some support amid otherwise muted moves in foreign exchange markets on Monday.

Money markets are now pricing in an 85% chance the Fed will ease rates by a quarter point next month, as traders pulled back wagers on the certainty of a cut after a raft of data including a jump in U.S. wholesale prices last month and a solid increase in July's retail sales figures.

Fed Chair Jerome Powell is due to speak on the economic outlook and the central bank's policy framework at the Jackson Hole symposium between August 21 and 23.

MUFG expects the U.S. central bank to cut rates in September as well, but it's unlikely that the Fed chair will give a clear signal towards that later this week, said Lee Hardman, senior currency analyst at MUFG Bank.

"It's probably too early for them (the Fed) to have complete confidence that they can cut rates again," he said.

The main event for investors on Monday is a White House meeting between Trump and Zelenskiy, who will be joined by some European leaders, as Washington presses Ukraine to accept a quick peace deal to end Europe's deadliest war in 80 years.

Trump had met his Russian counterpart Vladimir Putin on Friday and agreed that a peace deal should be worked upon without a ceasefire.

"Financial markets are continuing to trade like there could be some – still undetermined – path to peace," an ING analyst note said.

"With risk assets bid and energy prices offered, we expect the dollar to stay under a little pressure as dollar-based investors continue to put money to work," the note said.

Trump could offer NATO-like protection of Ukraine, and Russia is open to the idea, one of his top foreign policy officials said on Sunday.

In other currencies, the dollar rose 0.1% against the Japanese yen to 147.38 while the Swiss franc slipped 0.1% to 0.8069.

Japan's government on Friday brushed aside rare and explicit comments from U.S. Treasury Secretary Scott Bessent who said the Bank of Japan was "behind the curve" on policy, which appeared to be aimed at pressuring the country's central bank into raising interest rates.

The Australian dollar rose 0.1% to $0.6515, while the New Zealand dollar rose 0.3% to $0.5941, after falling 0.5% last week.

Cryptocurrency bitcoin halted its towering rally and eased from a record high. It last traded 2% lower at $115,362.46.

Ether similarly slid 4.3% to $4,275.85, after hitting its highest in nearly four years last week.

(Reporting by Jaspreet Kalra and Rae Wee; Editing by Shri Navaratnam, Sonali Paul, William Maclean)