The US dollar weakened on Monday in Asian trading as investors begin to prepare for this week’s FOMC meeting.
The Fed meets on Wednesday but is not expected to take any action this time after lifting the benchmark overnight interest rate in December for the first time in nearly a decade. But the policy statement will be closely watched for any clues as to when the central bank is likely to tighten monetary policy further. The FOMC event will be a high risk for the US dollar, which will likely become very volatile during the announcement.
The dollar index, which tracks the greenback against a basket of six major currencies, sipped 0.2 percent to 94.935.
The yen pulled off its lows that it reached on Friday when the Bank of Japan mentioned it is considering applying negative rates to its lending programme for financial institutions.
USDJPY fell 0.6 percent to 111.12 yen after it earlier rose as high as 111.90, its loftiest peak since April 1.
EURUSD rose 0.2 percent to $1.1245. Last week the European Central Bank held its policy rates at historic lows as expected.
Crude oil prices moved back down to reverse Friday’s gains. Last week oil prices marked a third straight week of gains as market sentiment turned more optimistic that the global supply glut may be easing.
Brent fell 1 percent to $44.66 a barrel, while U.S. crude shed 1.3 percent to $43.15.
Source:: Dollar eases ahead of Fed