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THE PESO weakened slightly against the dollar on Monday amid cautious trading as the market looks ahead to the US Federal Reserve’s meeting this week, where it is expected to keep rates steady but provide fresh guidance on their policy stance moving forward.

The local unit closed at P57.30 per dollar on Monday, declining by 4.9 centavos from its P57.251 finish on Friday, Bankers Association of the Philippines data showed.

The peso opened Monday’s session stronger at P57.20 against the dollar. Its intraday best was at P57.175, while its worst showing was at P57.31 versus the greenback.

Dollars traded went down to $1.02 billion from $1.39 billion on Friday.

“The dollar-peso closed a bit lower but moved mostly sideways on cautious trading ahead of the FOMC (Federal Open Market Committee) meeting later this week. Some are betting they will cut because of the weaker data recently, but most are expecting it in June,” a trader said in a phone interview.

The US central bank will review its policy settings on March 18-19. Fed policy makers are universally expected to leave rates in their current 4.25%-4.5% range when they meet this week, and traders are also betting against a rate cut at their May meeting, Reuters reported.

Investors will pay particularly close attention to the Fed’s own projections for inflation, unemployment and the path of rates, due to be published at the end of their two-day policy-setting meeting. In December, Fed policy makers forecast two interest-rate cuts this year.

Pricing of short-term interest-rate futures still reflects an expectation for a June start to Fed rate cuts, with likelier than not a total of three quarter-point reductions by the end of the year.

The peso was also dragged down by higher global crude oil prices recently, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Tuesday, the trader expects the peso to move between P57.10 and P57.40 per dollar, while Mr. Ricafort sees it ranging from P57.20 to P57.40.

The US dollar hovered close to a five-month low against its major peers on Monday, pressured by President Donald J. Trump’s erratic trade policies and a run of soft macroeconomic data, Reuters reported.

The US dollar index, which measures the currency against the six major counterparts, was little changed at 103.71 early in the Asian morning — A.M.C. Sy with Reuters