The dollar started Monday morning slightly higher before slipping 0.13% to 96.85 against a basket of six major currencies. Sentiment among investors is low, as doubts of another interest rate hike in 2017 loom. The dollar hit a one-week low on Friday of 96.84.
The Federal Reserve increased the interest rate for the second time this year in June, and projects that one more hike will take place this year.
Inflation has been subdued, causing doubt of a future rate hike. Traders expect just a 15% chance of a rate hike in September and less than a 40% chance of a rate hike in December.
Fed Chair Janet Yellen will give a speech on Tuesday to discuss the Fed’s plan for its balance sheet and discuss plans for future interest rate hikes.
USD/CAD slipped 0.37% in early-morning trade, while the USD/JPY edged up 0.11% to 111.41.
The greenback is being weighed down further on Monday, as U.S. durable goods sales in May fell more than expected.
European investors are awaiting remarks from the European Central Bank’s Mario Draghi later in the day. Draghi’s remarks will remain the focal point of the day’s trade, as investors expect a reduction in the ECB’s stimulus program.
German business confidence also helped the euro gain traction on Monday, with confidence hitting a record high in June. Germany is the largest economy in the eurozone.
EUR/USD advanced 0.14% on Monday, hitting 1.1211.
GBP/USD also edged up 0.15% on the day, rising on expectations that the Bank of England will raise interest rates in the coming months.
Australia’s dollar gained ground against the greenback, with the AUD/USD rising 0.36% to 0.7595 on Monday. The rapid increase comes as a recovery in oil prices helped push the AUD higher. Oil prices remain above November’s lows, but are still under continued threat from U.S. stockpile growth.