Major currencies traded in narrow ranges on Tuesday, maintaining subdued behaviour amid thin year-end trading volumes, as investors cautiously awaited Federal Reserve meeting minutes due later in the day for clues on the central bank’s policy outlook into 2026.

Activity across regional foreign exchange markets remained muted, with many participants sidelined ahead of the New Year holiday.

At 04:50 ET (09:50 GMT), the US Dollar Index was little changed against a basket of major peers, while US Dollar Index Futures edged down 0.1%. Yen’s USD/JPY pair fell 0.1% while GBP/USD rose 0.1%. EUR/USD was flat on the day.

Fed minutes eyed for 2026 rate outlook

Investors were focused on the release of minutes from the Federal Reserve’s December policy meeting, which are expected to shed light on discussions following the central bank’s decision to cut interest rates earlier this month.

Market participants anticipate the minutes may reveal divisions among policymakers over the pace and extent of further easing, particularly as inflation continues to cool.

Expectations that the Fed will deliver additional rate cuts in 2026 have been a key driver of currency markets in recent weeks. Traders have priced in the possibility of multiple cuts next year, a shift that has weighed on the dollar and, at times, offered support to emerging Asian currencies.

However, uncertainty over the timing and scale of easing has kept investors cautious, limiting directional moves.