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Dollar Inches Higher as GBP/USD Falls to 1-Week Lows

11/14/2017, 10:18:08 AMBasics of Trading
Dollar Inches Higher as GBP/USD Falls to 1-Week Lows

The dollar traded higher against a basket of currencies on Monday buoyed by a slump in sterling amid reports that UK Prime Minister Theresa May is set to face a leadership challenge while positive comments on tax reform from President Donald Trump lifted sentiment on the greenback.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.16% to 94.45.

Sterling slump to one-week lows against the dollar amid reports that dozens of members from British Prime Minister Theresa Conservative party had agreed to sign a letter of no-confidence in her as some members doubted Mrs. May ability to lead the UK into a successful Brexit.

GBP/USD fell 0.64% to $1.3108 below its 100-day morning average, a key technical level.

Also adding to the dollar strength were tweets from President Donald Trump in which he said that he was “proud” of lawmakers for getting “close” to approving a tax bill.

Trading volumes were somewhat light in Monday’s session as investors looked ahead to a busy week which includes an update on global monetary policy as central bankers from the Federal Reserve, Bank of England, and Bank of Japan are slated to deliver speeches.

European Central Bank chief Mario Draghi, Federal Reserve Chair Janet Yellen, Bank of Japan Governor Haruhiko Kuroda and Bank of England head Mark Carney will form a panel at the ECB-hosted conference in Frankfurt.

EUR/USD fell 0.03% to $1.1663 while EUR/GBP rose 0.6% to 0.8895.

USD/CAD was added 0.37% at C$1.2731 while USD/JPY rose 0.06% to Y113.63