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Dollar Flat as Pound Slips Ahead of 'Plan B' Brexit Vote

2019-1-29 16:29:12Trading Strategies
Dollar Flat as Pound Slips Ahead of 'Plan B' Brexit Vote

The U.S dollar was roughly unchanged against its rivals Monday as sterling slipped ahead of a vote on U.K. Prime Minister Theresa May's "Plan B" Brexit deal.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.4% to 95.4.

In the run up to the vote due to take place tomorrow, May called on U.K. lawmakers to support the amended version of the withdrawal agreement, the so-called Plan B. The amended deal includes alternative revisions to the Northern Irish backstop, Reuters reported, citing a source in May's office.

The backstop has been the main sticking point for pro-Brexit lawmakers. They argue it forces the entire UK to stay in the EU customs union if future trade talks fail to avoid a hard border in Ireland.

GBP/USD fell 0.31% to $1.3161, while the EUR/USD rose 0.21% to $1.1437.

The dollar's subdued start to the week comes a day ahead of Federal Reserve's two-day meeting. Many Fed watchers expect the U.S. central bank to stand pat on interest rates on Wednesday and tout a more dovish stance on monetary policy.

Investor attention will likely be focused on Fed Chairman Jerome Powell's news conference and the central bank's ongoing balance sheet reduction program. Powell's news conference will follow release of the Fed decision.

The Wall Street Journal reported Friday that the central bank is close to halting its balance sheet trimming program.

Elsewhere, USD/JPY fell 0.23% to Y109.28 as the yen was propped up by a flight-to-quality on concerns about global growth following soft Chinese industrial production data.

USD/CAD gained 0.27% to $1.3255 as the loonie came under pressure on falling oil prices.