Investing.com - The dollar was broadly lower against the other major currencies on Monday as news that former U.S. Treasury secretary Larry Summers withdrew from the race to be the next Federal Reserve chairman sparked a broad-based risk rally.
During European morning trade, the dollar was down against the yen, with USD/JPY down 0.44% to 98.91.
Investor confidence was boosted after Summers’ pulled out of the race to succeed Ben Bernanke as Fed chairman. Markets had viewed Summers’ as being likely to roll back economic stimulus measures more aggressively than his main rival for the post, Janet Yellen.
Investors were also focusing on the outcome of the upcoming Fed policy meeting, which concludes on Wednesday, after a recent series of lukewarm U.S. data raised doubts over whether the central bank will start to taper its USD85 billion-a-month bond buying program this month.
Elsewhere, the euro was close to three-week highs against the dollar, with EUR/USD up 0.34% to 1.3342.
European Central Bank President Mario Draghi said Monday that the economic recovery in the euro zone remains “fragile” and reiterated that interest rates will remain at current or lower levels for an “extended period”. The comments came during a speech in Berlin.
Separately, data showed that consumer price inflation in the euro zone remained steady at 1.3% on a year-over-year basis in August, unchanged from an initial estimate and in line with expectations.
The pound advanced to eight-month highs against the dollar, with GBP/USD climbing 0.33% to 1.5930.
The dollar was also lower against the Swiss franc, with USD/CHF falling 0.30% to 0.9267.
Elsewhere, the greenback was weaker against its Australian, New Zealand and Canadian counterparts, with AUD/USD jumping 1.20% to 0.9356, NZD/USD rallying 0.84% to 0.8201 and USD/CAD losing 0.57% to trade at 1.0295.
In New Zealand, a report by the Westpac Banking Corporation said its consumer sentiment index fell to 115.4 in the third quarter, from a reading of 116.6 in the previous quarter.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.37% to 81.37.
The U.S. was to publish the Empire state manufacturing index as well as data on industrial production and the capacity utilization rate later in the trading day.
During European morning trade, the dollar was down against the yen, with USD/JPY down 0.44% to 98.91.
Investor confidence was boosted after Summers’ pulled out of the race to succeed Ben Bernanke as Fed chairman. Markets had viewed Summers’ as being likely to roll back economic stimulus measures more aggressively than his main rival for the post, Janet Yellen.
Investors were also focusing on the outcome of the upcoming Fed policy meeting, which concludes on Wednesday, after a recent series of lukewarm U.S. data raised doubts over whether the central bank will start to taper its USD85 billion-a-month bond buying program this month.
Elsewhere, the euro was close to three-week highs against the dollar, with EUR/USD up 0.34% to 1.3342.
European Central Bank President Mario Draghi said Monday that the economic recovery in the euro zone remains “fragile” and reiterated that interest rates will remain at current or lower levels for an “extended period”. The comments came during a speech in Berlin.
Separately, data showed that consumer price inflation in the euro zone remained steady at 1.3% on a year-over-year basis in August, unchanged from an initial estimate and in line with expectations.
The pound advanced to eight-month highs against the dollar, with GBP/USD climbing 0.33% to 1.5930.
The dollar was also lower against the Swiss franc, with USD/CHF falling 0.30% to 0.9267.
Elsewhere, the greenback was weaker against its Australian, New Zealand and Canadian counterparts, with AUD/USD jumping 1.20% to 0.9356, NZD/USD rallying 0.84% to 0.8201 and USD/CAD losing 0.57% to trade at 1.0295.
In New Zealand, a report by the Westpac Banking Corporation said its consumer sentiment index fell to 115.4 in the third quarter, from a reading of 116.6 in the previous quarter.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.37% to 81.37.
The U.S. was to publish the Empire state manufacturing index as well as data on industrial production and the capacity utilization rate later in the trading day.