Investing.com - The dollar declined in value on Monday, falling 0.59% against a basket of international currencies, theUS dollar index. This was the biggest drop in the value of the dollar in two months, analysts said.
Traders are said to be squaring their positions ahead of this week's Fed meeting, and other central bank activities overseas.
The EUR/USD closed near $1.063 and the USD/JPY around 115.
The weakness in the dollar today completely erased last week’s gains, as measured by BBDXY, according to data from the Commodity Futures Trading Commission (CFTC).
Analysts explained that today's rally in oil prices pushed up the value of currencies from economies with large oil industries.
The dollar slipped against commodity-related currencies such as theAUD/USD, USD/NZD and USD/CAD today as oil prices climbed to their highest since mid-2015 on the momentum of a weekend agreement by OPEC and non-OPEC producers to curtail production.
Another factor in the exchange rate for forex traders today was concerns over the Federal Reserve market meeting in Washington D.C.
The Fed is expected to raise interest rates this week, only the second-time rates have increased since the stock market crash in 2008 and the subsequent market crisis around the globe.
Gains in the dollar have been since the election attributed to optimism over the forthcoming policies of President-elect Donald Trump.
Commodities are up across the board, analysts noted. Some analysts expect the dollar to rally. There is excitement in the market of the increasing expectation of increased demand from the U.S. economy during the incoming presidential administration.
Trump is filling his cabinet with former CEOs and others seen as friendly to business and investment, including a deregulatory advocate at the Environmental Protection Agency (EPA) and the former CEO of Hewlett-Packard, as well as the CEO of Exxon-Mobil Corp.