The dollar held onto last week’s gains on Monday as investors waited for Fed minutes, due on Wednesday.
The minutes are expected to give insights into the May 1 Fed meeting which decided to keep interest rates steady. Fed signaled little appetite to adjust them any time soon, taking note of strong jobs growth.
Since then, trade tensions between Washington and Beijing have escalated. This fueled expectations the U.S. central bank will have to cut interest rates in the coming months. Increased expectations of rate cuts have so far have had little impact on the dollar. However, the US dollar has found strength from the trade tensions as some investors have turned to it as a safe haven.
The dollar index firmed near a two-week high, extending gains. Strong U.S. housing data and a report pointed to lower unemployment helped the U.S. currency to mark its biggest weekly rise last week since early March.
The greenback holds gains against a basket of its rivals after rising 0.7% last week, its biggest weekly rise in two months. The currency underpinned by robust economic reports out of the United States, even as geopolitical risks and trade tensions persist.
START TRADINGForex – Dollar holds gains ahead of Fed minutes
The Australian dollar surged and is on track for its biggest rise this year. The Aussie was last up 0.7% at $0.6914, having bounced from a four-month trough of $0.6865.
The pound recouped some losses after posting its biggest weekly drop in six months last week. Sterling inched above five-month lows on Monday. The British currency edged 0.2% higher at $1.2736 and 0.1% stronger against the euro at 87.62 pence. Prime Minister Theresa May said on Sunday she would make a “new bold offer” to British lawmakers.
Oil prices edged up to near multi-week highs on Monday. OPEC indicated it was likely to maintain production cuts that have helped boost prices this year. Escalating Middle East tensions provided further support. Brent crude was up by 21 cents at $72.42 a barrel by 1352 GMT, having earlier touched $73.40, the highest since April 26. U.S. West Texas Intermediate crude was up 15 cents at $62.91 a barrel, after hitting a three-week high of $63.81.
Gold price fell to a more than two-week low on Monday as investors preferred the safety of the dollar. Spot gold was steady at $1,277.86 an ounce at 1210 GMT, having touched $1,273.22 for its lowest since May 3. U.S. gold futures were also little changed at $1,276.50.
Silver was up 0.2% at $14.42 an ounce, having touched a more than five-month low at $14.33.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money