NEW YORK: The dollar remained relatively weaker against most of its major peers on Monday, as traders wait for the Federal Reserve to acknowledge an end to its hiking cycle while trying to hedge the risk of potential recession.

The dollar index, which measures the currency against six rivals, was down 0.1% in late morning trading at 101.21, a better showing than the one-year low of 100.78 reached last month.

The Fed raised rates by 25 basis points last week but sounded slightly more cautious than peers on the outlook, dropping guidance about the need for future hikes.

“Everybody keeps looking for the economic activity and the data to support the idea that there’ll be a recession in the US whether it’s in the second half of this year (or) in the final quarter,” said Joe Francomano, portfolio manager at Gelber Group LLC in New York.

Sterling hit a more than one-year peak against the dollar on Monday, with the pound traded as high as $1.2668, its highest since April 2022, but slipped slightly below that, and was last seen up 0.11% at $1.2641. The pound remains in focus this week ahead of an expected Bank of England rate increase on Thursday, and has also been firming versus the euro.

Against the dollar, the euro has rallied nearly 16% from September lows, and is trading little changed on the day at $1.1022, supported by expectations the European Central Bank will keep interest rates high for longer than the Fed. The ECB last week also slowed the pace of its interest rate increases but signalled more tightening to come.

Traders remain watchful of the debt ceiling impasse on Capitol Hill, with the Treasury Secretary warning the government might be unable to pay debts by June 1.

Elsewhere, the dollar was flat against the yen at 134.885.