The dollar pulled away from nine-month lows against a basket of the other major currencies on Monday, but it remained shaky amid expectations that several global central banks are getting ready to tighten monetary policy.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.17% to 95.55 by 07.23 GMT (03.23 ET). On Friday, the index fell to a nine-month trough of 95.22.
In comments last week the heads of the European Central Bank, the Bank of England and the Bank of Canada adopted a more hawkish view on monetary policy, indicating that they were getting ready to join the Federal Reserve in policy tightening.
Hawkish signals from foreign central banks contrasted with doubts over whether the Fed will be able to hike rates again this year given a recent batch of weak U.S. economic data and growing skepticism that the Trump administration will be able to deliver on its pro-growth agenda.
The dollar was higher against the yen, with USD/JPY rising 0.13% to 112.55, after briefly falling to 112.09 overnight.
The yen briefly rose after Japanese Prime Minister Shinzo Abe's Liberal Democratic Party suffered an historic defeat in an election in Tokyo on Sunday, in a vote that could be a harbinger for national elections.
The euro was lower, with EUR/USD down 0.2% at 1.1402, off Friday’s almost14-month peaks of 1.1444.
Sterling was a touch lower, with GBP/USD slipping 0.12% to 1.3013 after rising as high as 1.3029 on Friday; it’s strongest level since May 23.
The greenback was higher against its Canadian counterpart, with USD/CAD rising 0.16% to 1.2981, but was still within striking distance of Friday’s trough of 1.2945, its weakest since September 9.
The Australian and New Zealand dollars slipped back from multi-month highs set on Friday.
AUD/USD was down 0.22% to 0.7672, off Friday’s three-month peak of 0.7711, while NZD/USD lost 0.29% to trade at 0.7310 after touching a five-month high of 0.7345 on Friday.
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