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US Dollar Index (DXY) maintains losses near the intraday lows near 103.00 as it maintains Friday's retracement from a multi-day high amid pessimistic concerns regarding US debt ceiling negotiations and the Federal Reserve (Fed) during early Monday trading. In doing so, the US Dollar index against the six main currencies also reflects the market's readiness for this week's most important data/events.

A recent negative for the DXY is the inability of US policymakers to reach an agreement on the debt ceiling, as well as conflicting comments from Federal Reserve (Fed) officials.

According to Reuters, US President Joe Biden and House Republican Speaker Kevin McCarthy will meet on Monday to discuss the debt ceiling, following a "productive" phone call as the president returned to Washington. It is important to note that Republicans were less optimistic and halted negotiations over the weekend.

Jerome Powell, chairman of the Federal Reserve, highlighted inflation concerns elsewhere on Friday, but also stated that the recent banking crisis, which resulted in stricter credit standards, has reduced the pressure to raise interest rates. The same weighed on the Fed's hawkish wagers and gave US Dollar investors a breather.

It should be noted that the market's wagers on a 0.25% Fed rate hike in June have increased recently, while calls for a rate cut in 2023 have decreased, as a result of positive U.S. economic data and hawkish comments from Federal Reserve (Fed) officials over the past week. The same maintains DXY buyers optimistic prior to the key catalysts.

Wall Street closed with minor losses, and S&P 500 Futures are tracking the same direction, while US Treasury bond yields grind higher.

The minutes of the Federal Open Market Committee (FOMC) meeting, the preliminary readings of the Purchasing Managers Index (PMI) for the month of May, and the Federal Reserve's preferred inflation gauge, the US Core PCE Price Index, will be crucial for DXY traders to monitor in the near future. US debt ceiling pronouncements are the most important factor in determining near-term US Dollar movements. If US policymakers are successful in extending the debt ceiling, the US Dollar Index may appreciate further.

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