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The dollar edged higher and the UK pound was near a 14-month peak on Monday as investors digested a slew of monetary policy decisions by central banks last week and looked ahead to a crunch decision by the Bank of England on Thursday.

Currency market moves have been dominated by central bank efforts globally to curb high inflation, with the dollar index sliding to its biggest weekly fall since January last week after the U.S. Federal Reserve skipped a rate rise.

The dollar index , which measures the U.S. currency against six major counterparts, ticked up 0.1% to 102.420. It remained not far from a one-month low of 102.00 it touched on Friday. U.S. markets are closed on Monday for a holiday.

Investors expect the Bank of England to hike rates by at least 25 basis points when it meets on Thursday, as it battles inflation running at more than four times its target.

The pound is changing hands near 14-month highs against the dollar on expectations UK rate rises will outpace other major economies. The pound edged down 0.1% at $1.28080.

Money markets place a 74% chance of the BoE opting for a 25 basis points hike and a 26% likelihood of a 50 basis point jump.

In a busy week for central banks last week, the European Central Bank on Thursday raised rates by 25 basis points and left the door open to more hikes, while the Bank of Japan's decision on Friday to stick with its ultra-easy policy kept the yen fragile.

Euro zone inflation is at risk of overshooting recently lifted forecasts and the ECB should err on the side of raising rates too much rather than too little, ECB board member Isabel Schnabel said on Monday.

The bloc's chief economist Philip Lane earlier said the ECB was likely to raise rates again next month but the September meeting is too far away and the decision will be shaped by incoming data.

The euro dipped 0.2% to $1.09230, trading close to a one-month peak, while the yen was broadly flat at 141.840, near a seven-month low of 142.005 earlier on Monday.

Traders will closely watch U.S. congressional testimony scheduled to be given by Federal Reserve chair Jerome Powell on Wednesday and Thursday this week for any hints on the future path for rates in the world's largest economy.

Currency analysts at MUFG said in a note that the testimony was one of the important risk events for the dollar this week, but said they expected similar messaging following the Fed decision last week.

"The Fed was clear that they now felt they could slow the pace of hikes but that the decision to skip a hike this month did not mean the hiking cycle was over," the analysts said.

Markets are pricing in a 72% probability of the Fed hiking by 25 basis points next month, the CME FedWatch tool showed. (Reuters)

New Zealand Prime Minister Chris Hipkins said on Monday he would visit China from June 25 to 30, leading a trade delegation that includes some of the country's biggest companies.

Hipkins will meet President Xi Jinping, Premier Li Qiang, and the chairman of the standing committee of the National People's Congress Zhao Leji during his visit.

"I'm looking forward to meeting with China's leadership through various face to face bilateral meetings, where topics such as climate change, economic stability, regional and global security, human rights, and the war in Ukraine will be discussed," Hipkins said in a statement.

A spokeswoman for China's foreign minister declined to offer details on the upcoming visit, when asked at a regular briefing on Monday.

"What I can tell you is that China values its relations with New Zealand and looks forward to strengthening cooperation with New Zealand in various fields, including the economy and trade," spokeswoman Mao Ning told reporters. (Reuters)

The Chinese embassy in London on Sunday condemned a meeting last week between Britain's security minister, Tom Tugendhat, and Taiwan's digital minister, saying it violated international relations.

Reuters reported on Friday that Tugendhat had met the Taiwanese Digital Affairs Minister Audrey Tang on Wednesday during a rare high-level ministerial trip to Britain. One source said they had discussed mutual security interests.

China considers democratically governed Taiwan as part of its territory and fiercely objects to perceived foreign interference with the island.

"This move seriously violates the one-China principle and the basic norms of international relations," a spokesperson for the Chinese embassy in London said in a statement.

"It sends a seriously wrong signal to the separatist forces for 'Taiwan independence' and grossly interferes in China's internal affairs. China strongly deplores and firmly opposes this."

Britain only has formal diplomatic relations with Beijing, but maintains a de facto embassy in Taipei. Although junior British ministers hold talks with their Taiwanese counterparts, the convention was that senior British ministers do not meet with Taiwanese officials.

Tugendhat, who was sanctioned by China two years ago for speaking out about alleged human rights abuses in Xinjiang, is not a full cabinet minister but attends cabinet meetings in his role as security minister, where he is responsible for countering terrorism, domestic state threats and economic crime.

"We want to make it clear to the UK side that any actions that undermine China's interests will be met with resolute responses," the Chinese embassy spokesperson said. (Reuters)

Support for Japanese Prime Minister Fumio Kishida's cabinet slid 12 percentage points to 33%, coming off a peak during a Group of Seven leaders summit in Hiroshima, the Mainichi Shimbun reported on Sunday, citing its own poll.

The disapproval rate rose to 58% from 46% in the previous survey in late May, after a scandal involving Kishida's eldest son and a series of technical problems with the national identity card system, according to Mainichi, which conducted the poll over the weekend.

Approval for the Kishida government had been on the upswing in the run up to the G7, reaching the highest level last month since August 2022, Mainichi said. Some had speculated Kishida would call a snap election in advance of the party leadership race next year.

A separate poll conducted by the Kyodo news agency showed on Sunday that support for Kishida's cabinet sank to 40.8% from 47% in May. (Reuters)