Investing.com - The dollar traded lower against a basket of major currencies on Monday, as investors mulled over the outcome of the Federal Reserve’s two-day meeting while the pound surged higher after the Scottish Government announced a second referendum.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.22% to 101.16.
Bearish sentiment in the greenback continued, as investors turned attention to the pace of rate hikes this year, after the possibility of rate hike later this week rose to its highest level.
According to the Investing.com’s Fed rate monitor tool, 95% of traders expect a rate hike on Wednesday.
Elsewhere, the pound was one the biggest gainers against the greenback, after Scottish First Minister Nicola Surgeon announced in a speech Monday, the Scottish Government will move to hold a second referendum on independence from the United Kingdom.
On the Brexit front, expectation grew that British Prime Minister Theresa May could trigger Article 50, which formally starts the Brexit process, as early as Tuesday, as ministers believe MPs will reject the two changes made to the Brexit bill in the House of Lords when they debate it this week.
GBP/USD traded 0.50% higher to $1.2231.
The EUR/USD fell 0.11% to $1.0667, after the single currency rallied to one-month highs of $1.0715, following a report on Friday that the European Central Bank (ECB) had considered the possibility of raising interest rates before the end of its quantitative easing programme.
Elsewhere, the dollar struggled against its Canadian counterpart with USD/CAD down 0.24% to $1.3439 while USD/JPY slipped 0.10% to 114.68.