The US dollar plunged lower against a basket of currencies on Monday, awaiting the Federal Reserve monetary policy that would give more clarity on the timing of an initial rate hike. Investors were turning their attention to Wednesday's Fed statement to see if policymakers will give any indication on the timing of a rate lift-off. On Friday, the Fed mistakenly published a staff projection pointing to a quarter point rate hike later this year.
The dollar has been boosted in recent weeks by mounting expectations that the U.S. central bank could raise rates as soon as September if the economy continues to improve as expected. The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, is currently at 96.74, off its session's low of 96.48.
Dollar failed to gain despite positive U.S. data on durable goods order. The U.S. Commerce Department reported on Monday that total durable goods orders increased by 3.4% last month, beating expectations for a gain of 3.0%. Orders for durable goods in May were revised to a drop of 2.1% from a previously reported decline of 2.2%. Core durable goods orders, excluding volatile transportation items, inched up by 0.8% in June, topping forecasts for an increase of 0.5%. Core durable goods orders dipped 0.1% in May, whose figure was revised from previously reported flat reading.
The euro, on the other hand advanced against the dollar as talks between Greece and its international creditors on a new bailout package were expected to get underway. Talks had been expected to start on Friday but were delayed by logistical issues, including security matters. A new agreement must be reached before August 20 when Greece must repay more than �3 billion to the European Central Bank. The single currency remained supported at around 1.1067 versus the greenback from 1.0983 late Friday.
The pound was steady, with GBP/USD at 1.5522. USD/JPY was last down 0.33% to almost two-week lows of 123.39.
Powered by Commodity Insights