The dollar eased on Monday, retreating against the euro and other major currencies. The yen weakened as investors remained focused on the U.S. Federal Reserve’s meeting this week.
The central bank is expected to raise rates at its meeting. The Fed is also expected to announce its updated economic forecasts. Investors will be focused on the outlook for inflation and the projected pace of rate hikes for 2017.
The euro steadied against other currencies, and gained nearly half a percent against the dollar in morning trade, at 1.06.
The euro rebounded last week after the European Central Bank made the decision to extend is bond-buying program and will scale back the size of its asset purchases.
The dollar index was nearly 1% lower, indicating that investors aren’t convinced the Fed will raise rates as many times as projected next year.
The weekend deal between OPEC and non-OPEC members to curb production also sent the Canadian dollar higher, weakening the greenback in the process.
Crude prices gained nearly 5%, sending the oil-dependent currency higher. The Canadian dollar edged up to a seven-week high against its U.S. counterpart, with USD/CAD at 1.3122.
Oil prices are now at the highest level since July 2015.
Meanwhile, the dollar gained on the yen, trading up 0.39% at 115.83. The yen weakened despite reports that machinery orders were up for the month.
Japan’s core machinery increased for the first time in three months, rising 4.1% month-on-month. A 1% gain was expected. Orders, however, plummeted 5.6% year-on-year, failing to meet the 4.5% decline that was projected. Producer prices were down 2.2% year-on-year, just surpassing the 2.3% drop expected.
Elsewhere, the pound gained against the greenback to trade at 115.83. Investors were looking ahead to a string of UK economic reports and the Bank of England’s policy meeting this week.