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U.S. one hundred dollar bills are being shown in this picture illustration taken in Buenos Aires, Argentina, on Dec. 15, 2023.

The dollar hung near a seven-month low on Tuesday on wagers the U.S. central bank will start cutting interest rates from next month, with traders preparing for comments from Federal Reserve Chair Jerome Powell on Friday.

The weakness in the dollar lifted the euro to its highest this year, while sterling was perched near a one-month peak. The emerging markets currency index was also at a record high.

The Japanese yen was a shade stronger at 146.50 per dollar, hovering close to the near two-week high it touched in the previous session but still further away from the seven-month high of 141.675 it touched at the start of August.

The focus this week will be on Powell's speech in Jackson Hole, likely keeping investors hesitant in placing major bets before the event.

Investors largely expect Powell to acknowledge the case for a rate cut and will parse his words for cues on whether the Fed will start with a 25 basis point cut or a 50 bps cut in September.

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