The U.S. dollar weakened on Monday, due to the outcome of the U.S. Federal Reserve meeting last week and also in view of the meetings of the other major central banks this week.
- The dollar index weakened 0.2% to 97.035 against the other six currencies in the currency basket, falling short of Friday’s 18-month high of 97.441.
- EUR/USD was up 0.2% to 1.1166.
- USD/JPY was up 0.2% to 115.41.
- GBP/USD was up 0.1% to 1.3422.
- AUD/USD was up 0.6% to 0.7031.
Traders took profits Monday after the dollar had its best week in seven months on comments from Fed Chairman Jerome Powell, who indicated the U.S. central bank would consider more rate hikes this year.
Although the dollar weakened on Monday, it will continue to strengthen until after the Federal Reserve raises interest rates, JPMorgan Chase reports.
This week, however, the focus will turn somewhat away from the Federal Reserve and toward the other central banks.
The European Central Bank (ECB) and the Bank of England (BOE) will meet on Thursday in the face of pressure for monetary tightening by the Fed. For the near future, experts do not expect any changes in monetary policy at the ECB for the time being, while at the BOE another hike of 0.25% to 0.5% is expected.