The euro recovers nearly 0.5% from recent lows on Monday as the dollar dived. Traders are hesitant to send the U.S. dollar further ahead of the Federal Reserve’s policy meeting this week.
Last week, the dollar enjoyed its best weekly performance since September, reaching an 18-month high. The euro weakened after the ECB cut inflation and growth forecasts and struck a cautious tone about the world economy outlook.
The mood on Monday, however, was less positive for the dollar.
The Fed begins its two-day policy meeting on Tuesday and is expected to raise rates for a fourth time in 2018. All eyes will be on signals about the pace of further tightening. In addition, traders will focus on the Fed’s sense of how the economy holds up amid a U.S.-China trade conflict.
START TRADINGForex – Commodities – Euro recovers as greenback dives before FED meeting
The dollar index, which measures it against a basket of currencies, slipped 0.3%, below last week’s 18-month high of 97.711. Weaker-than-expected economic data from China and Europe last week sent investors towards the perceived safety of the dollar.
The euro rose 0.4% on Monday, even though EU statistics office Eurostat earlier lowered November’s inflation reading. The euro fell as low as $1.1270 last week.
The yen was unchanged at 113.39 yen per dollar.
Sterling added half a percent to $1.2646, buoyed by the dollar’s move downwards. Pound stuck near 20-month low as UK gov’t rules out second Brexit referendum. Against the euro, the pound fell 0.1 percent to 0.90 pence.
Sterling has fallen for five consecutive weeks against the dollar. Traders say the 20-month low of below $1.25 hit on Wednesday would act as a temporary support for the battered currency.
In commodities, oil prices rose after a key Middle East oil minister suggested the market was rebalancing. However, investor sentiment remained under pressure from oversupply and concern over the prospects for global economic growth and fuel demand.
Brent crude oil LCOc1 was up 30 cents a barrel at $60.58 by 1430 GMT. U.S. light crude CLc1 was 10 cents higher at $51.30.
Sources: Reuters, CNN money, Bloomberg
PLEASE NOTE The information above is not investment advice.