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Euro consolidates gains near 1-month high
The euro traded near the one-month high reached last week against the dollar after surging following the European Central Bank meeting. EUR/USD hovered at $1.1156 in Monday Asian session trading. On Thursday the pair hit a high of $1.1218 when it strengthened after the ECB signalled that it may limit future interest rate cuts.
The dollar steadied the yen following last week’s large swings, as the market eyes the Federal Reserve policy meeting as well as the Bank of Japan meeting this week.
USD/JPY was little changed around 113.93 yen having gained 0.6 percent on Friday. An improvement in risk appetite on the back of rising equities and crude oil had lifted the dollar from a low of 112.22 to as high as 114.45 yen last week.
The Bank of Japan is due to announce its rate decision on Tuesday after concluding a two-day meeting. It is expected to hold rates this time after adopting negative interest rates in January. Since then, the yen has not weakened, much to the disappointment of the BoJ.
Meanwhile, the Federal Reserve is also seen to hold rates at this week’s policy review. But investors will look for any hints in the FOMC statement and Fed funds rate forecasts for any signal that the Fed will intend to hike rates more than once this year.
The dollar index was steady at 96.186 after shedding 1.2 percent last week.
In other currencies, the British pound traded near a one-month high of $1.4437 set on Friday.
Commodity-linked currencies were buoyed by recent gains in crude oil and overall improvement in global risk sentiment.
The Canadian dollar traded near a four-month high of C$1.3168 per USD, while the Australian dollar touched an eight-month high of $0.7584.
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