A softer US dollar reflected cautious trading ahead of the Federal Reserve’s widely expected interest rate cut later this week. Market participants positioned for a 25-basis-point reduction as treasury yields declined and risk appetite improved. Analysts said the dollar index hovered near 104.5 after brief intraday losses. Investors focused on Jerome Powell’s comments for clues on the easing cycle’s duration and inflation guidance. Strategists expect volatility around policy announcements, though global currency markets appear aligned toward synchronized monetary accommodation.