The U.S. dollar weakened against most major currencies as expectations for an accommodative Federal Reserve kept the greenback subdued.
The euro was 0.16% higher at $1.1343, after hitting a two-week high of $1.1359 against the U.S. dollar. The dollar has weakened as investors expect the Fed to strike a dovish tone when it meets this week.
Market participants expect the central bank to keep its benchmark overnight interest rate unchanged. They also expect to stick to its pledge of a “patient” approach to monetary policy. Soft U.S. manufacturing data on Friday helped cement that expectation.
Traders will focus on whether policymakers will have sufficiently lowered their interest rate forecasts to more closely align their individual rate views for the next three years with the pledge of patience, analysts say. Investors will also be watching for details on any plans by the Fed to stop culling its holdings of nearly $3.8 trillion in bonds.
START TRADINGForex – Dollar weakened ahead of accommodative Fed
The Australian and New Zealand dollars rose for a second straight session on Monday, helped by expectations for a dovish Fed. The Aussie climbed to a more than two-week high against its U.S. counterpart.
The British pound fell towards $1.32 as Prime Minister Theresa May tried to salvage her Brexit deal by winning over doubtful lawmakers with threats and promises to avoid any move to oust her. May is expected to hold a third vote on her Brexit deal on Tuesday or Wednesday.
The pound was down 0.4% at $1.3245. It was also weaker against the euro, down half a percent at 85.62 pence. Last week the currency swung wildly, trading between $1.2945 and $1.3380.
The Canadian dollar was little changed against its U.S. counterpart. The Canadian dollar traded in a narrow range ahead of Tuesday’s federal budget as oil prices rose and investors bet on the Fed striking a dovish tone this week.
Oil edged further above $67 a barrel on Monday, supported by the prospect of prolonged OPEC-led oil supply curbs though concern that an economic downturn may dent fuel consumption curbed gains. Brent crude, the global benchmark, rose 20 cents to $67.36 a barrel at 1207 GMT. It reached a 2019 high of $68.14 last week. U.S. West Texas Intermediate crude added 5 cents at $58.57.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.