07:58 AM EDT, 09/16/2024 (MT Newswires) -- The US dollar fell against its major trading partners early Monday as the focus turned to the Federal Open Market Committee's pending rate policy announcement Wednesday and shifting chances of a larger front-loaded rate cut than previously expected.

The CME FedWatch tool shows a 59% chance of a 50 basis point rate reduction being priced in at the meeting from the current target range of 5.25% to 5.50% and a 41% chance of a smaller 25 basis point rate reduction. The odds were about even Friday and were tilted heavily in the direction of a 25 basis point reduction a week ago.

The week starts light with only the New York Federal Reserve's Empire State manufacturing reading scheduled for 8:30 am ET.

Tuesday's highlights include data on retail sales, industrial production and home builders' sentiment.

Home building and oil stocks data will be released Wednesday, before the two-day FOMC meeting announcement. Thursday's schedule is full, with jobless claims, the current account gap, manufacturing data from the Philadelphia Fed and the existing-home sales.

The week ends on a light note, with state-level unemployment data and the St. Louis Fed's gross domestic product Nowcast estimate.

Federal Reserve officials remain in their 'quiet period' until after the FOMC meeting, which begins Tuesday.

A quick summary of foreign exchange activity heading into Monday:

EUR/USD rose to 1.1119 from 1.1076 at the Friday US close and 1.1087 at the same time Friday morning. Eurozone wage growth slowed in Q2 when the trade surplus narrowed less than expected in July, data released overnight showed. European Central Bank policy member Philip Lane is scheduled to speak at 8:00 am ET. The next ECB meeting is scheduled for Oct. 17.

GBP/USD rose 1.3195 from 1.3124 at the Friday US close and 1.3118 at the same time Friday morning. There are no UK data on Monday's schedule. The next Bank of England meeting is scheduled for Thursday, when no change in interest rates is expected.

USD/JPY fell to 140.1300 from 140.3971 at the Friday US close and 140.9342 at the same time Friday morning. Monday is a holiday in Japan, so no Japanese data were released overnight. The next Bank of Japan meeting is scheduled for Thursday and Friday, with the policy announcement scheduled for release late Thursday evening in US time. No change in interest rates is expected.

USD/CAD fell to 1.3581 from 1.3589 at the Friday US close and 1.3594 at the same time Friday morning. Canada manufacturing sales and new motor vehicle sales, both for July, are due for release at 8:30 am ET. The next Bank of Canada meeting is scheduled for Oct. 23.