Euro, Pound Rise as Dollar Weakens
The U.S. dollar was lower on Monday, while the euro and sterling were higher as investors wait for a a number of central bank meetings this week.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.43% to 94.06 as of 11:34 AM ET (15:34 GMT). Meanwhile, the pound inched higher, with GBP/USD rising 0.31% to 1.3146.
Investors are waiting for a flurry of central bank policy decisions this week that could determine direction of currencies. The Federal Reserve makes a policy decision Wednesday afternoon, but with no rate hike expected. Investors expect the Fed to raise rates in September, with the chance of an increase at 87.8%.
The U.S. economy accelerated as expected in the second quarter, underlining the case for the Federal Reserve to gradually increase interest rates.
Gross domestic product registered a seasonally-adjusted annual rate of 4.1% growth in the second quarter, its fastest rate of growth since the third quarter of 2014.
Other central banks are also meeting this week, with the Bank of Japan ending its two-day meeting on Tuesday. The Bank of England is expected to raise interest rates on Thursday, despite Brexit uncertainty.
The dollar was lower against the safe-haven yen, with USD/JPY decreasing 0.05% to 110.97. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.
The euro was higher after the dollar fell, despite the European Central Bank keeping rates unchanged last week and reiterating its plan to slowly end its accommodative monetary policy. EUR/USD rose 0.48% to 1.1713
The Australian dollar was higher, with AUD/USD rising 0.11% at 0.7408, while NZD/USD inched up 0.54% to 0.6830. The loonie was higher against the greenback, with USD/CAD down 0.38% to 1.3010.