Investing.com - The dollar turned broadly lower against the other major currencies in subdued trade on Monday, as market appetite improved before the year end, although demand for the greenback remains supported by the Federal Reserve's decision to taper stimulus.
Trading volumes were thin as many investors already closed books before the end of the year, reducing liquidity in the market and increasing volatility, which helped exaggerate market moves.
During European afternoon trade, EUR/USD rose 0.33% to 1.3790.
The euro remained supported after European Central Bank Governing Council member Jens Weidmann on Friday said keeping interest rates low may endanger political reforms.
According to Germany’s Bild newspaper, Weidmann said low inflation shouldn’t be used to justify loose monetary policy. "We must take care to raise interest rates again in a timely manner should inflation pressures build," he reportedly added.
Earlier Monday, Italy’s Treasury sold EUR3 billion worth of ten-year debt at an average yield of 4.11%, up from 4.01% at a similar auction last month. The yield on Italian 10-year bonds stood at 4.163% following the auction.
Meanwhile, the greenback still found support amid expectations of further stimulus tapering by the Fed. The U.S. central bank will start reducing its bond-buying stimulus program by USD10 billion a month in January, amid indications of an improving U.S. economy.
The pound was steady against the dollar, with GBP/USD eased up 0.05% to 1.6486.
Elsewhere, the greenback was steady against the yen, still trading near five-year highs, with USD/JPY down 0.04% to 105.13 and declined against the Swiss franc, with USD/CHF down 0.35% to 0.8884.
The yen continued to weaken amid speculation the Bank of Japan will have to expand its stimulus program in the coming months in order to meet its target of 2% inflation by 2015.
Minutes of the BoJ’s November policy meeting last week showed that that not all board members were convinced that the country’s growth was on a long-term upward trend. Investors also reacted to comments made by BoJ Governor Haruhiko Kuroda, who said that the nation’s economy hadn’t yet completely wiped out deflation.
The greenback was lower against the Australian, New Zealand and Canadian dollars, with AUD/USD up 0.26% to 0.8890, NZD/USD gaining 0.30% to 0.8178 and USD/CAD down 0.15% to 1.0694.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.25% to 80.26.
Later in the day, the U.S. was to release industry data on pending home sales.
Trading volumes were thin as many investors already closed books before the end of the year, reducing liquidity in the market and increasing volatility, which helped exaggerate market moves.
During European afternoon trade, EUR/USD rose 0.33% to 1.3790.
The euro remained supported after European Central Bank Governing Council member Jens Weidmann on Friday said keeping interest rates low may endanger political reforms.
According to Germany’s Bild newspaper, Weidmann said low inflation shouldn’t be used to justify loose monetary policy. "We must take care to raise interest rates again in a timely manner should inflation pressures build," he reportedly added.
Earlier Monday, Italy’s Treasury sold EUR3 billion worth of ten-year debt at an average yield of 4.11%, up from 4.01% at a similar auction last month. The yield on Italian 10-year bonds stood at 4.163% following the auction.
Meanwhile, the greenback still found support amid expectations of further stimulus tapering by the Fed. The U.S. central bank will start reducing its bond-buying stimulus program by USD10 billion a month in January, amid indications of an improving U.S. economy.
The pound was steady against the dollar, with GBP/USD eased up 0.05% to 1.6486.
Elsewhere, the greenback was steady against the yen, still trading near five-year highs, with USD/JPY down 0.04% to 105.13 and declined against the Swiss franc, with USD/CHF down 0.35% to 0.8884.
The yen continued to weaken amid speculation the Bank of Japan will have to expand its stimulus program in the coming months in order to meet its target of 2% inflation by 2015.
Minutes of the BoJ’s November policy meeting last week showed that that not all board members were convinced that the country’s growth was on a long-term upward trend. Investors also reacted to comments made by BoJ Governor Haruhiko Kuroda, who said that the nation’s economy hadn’t yet completely wiped out deflation.
The greenback was lower against the Australian, New Zealand and Canadian dollars, with AUD/USD up 0.26% to 0.8890, NZD/USD gaining 0.30% to 0.8178 and USD/CAD down 0.15% to 1.0694.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.25% to 80.26.
Later in the day, the U.S. was to release industry data on pending home sales.