TOKYO, May 22 Reuters The dollar was steady against the euro and yen on Monday, as U.S. debt ceiling negotiations were set to resume and after Federal Reserve Chair Jerome Powell indicated he favours a meetingbymeeting approach when it comes to future policy moves.

The greenback was down 0.1 at 137.85 yen to start the week, having snapped a sixday winning streak on Friday, pulling back from a sixmonth peak.

The euro was little changed 1.0805, having hit a sevenweek low of 1.0760 on Friday.

Investors are now waiting for a key meeting between U.S. President Joe Biden and House Republican Speaker Kevin McCarthy to discuss the debt ceiling on Monday, after a phone call on Sunday that both sides described as positive.

Analysts said optimism over the debt limit was supporting the dollar.

Friday there was a bit of a setback but there39;s a bit more optimism after the weekend, said Francesco Pesole, FX strategist at ING, citing the phone call between Biden and McCarthy.

Markets are seeing a deal on the debt limit and at the same time the Fed pushing back on rate cuts which is ultimately proving positive for the dollar.

Fed Chair Powell told a central bank conference in Washington on Friday that tighter credit conditions mean our policy rate may not need to rise as much as it would have otherwise to achieve our goals, although he reiterated that decisions would be made meeting by meeting.

Ultimately, the take away from Powell is if data suggests there is more need for…