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Dollar pares gains but remains broadly supported by Fed remarks

Published 08/22/2016, 11:05 AM
© Reuters.  Dollar pares gains though broadly supported by Fed comments
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Investing.com - The dollar pared gains against the other major currencies in subdued trade on Monday, but hopes for a possible U.S. rate hike before the end of the year still lent support to the greenback.

EUR/USD slipped 0.10% to 1.1312, off the four-day low of 1.1270 hit overnight.

The dollar remained supported after Federal Reserve Vice Chair Stanley Fischer on Sunday noted the strong gains of U.S. labor market under the current economic expansion that is close to the Fed's goals of maximum employment and price stability.

San Francisco Federal Reserve President John Williams on Thursday signaled support for a September rate increase.

"In the context of a strong domestic economy with good momentum, it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later," he said.

Minutes of the Federal Reserve's July policy meeting published earlier in the week showed committee members remained divided on the timing of the next rate hike, although there is general agreement that more data is needed before such a move.

GBP/USD gained 0.31% to 1.3117.

USD/JPY added 0.21% to 100.42, while USD/CHF rose 0.22% to 0.9622.

The Australian dollar was fractionally lower, with AUD/USD down 0.09% at 0.7620, while NZD/USD held steady at 0.7277.

Elsewhere, USD/CAD gained 0.35% at 1.2915, close to a one-week high of 1.2929 hit earlier in the day.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 94.55, after rising to three-day highs of 94.94 overnight.

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