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Forex - Dollar at 3-week lows on rate hike doubts

Published 10/12/2015, 03:12 AM
© Reuters.  Dollar at 3-week lows as Fed seen likely to delay liftoff
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Investing.com - The dollar was trading at three-week lows against a basket of other major currencies on Monday as doubts over whether the Federal Reserve will hike interest rates before the years end continued to weigh.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.12% to 94.82, just above the three week low of 94.75 set on Friday.

The greenback remained under pressure after last week’s minutes from the Fed’s September policy meeting showed that most policymakers thought an initial rate hike should still come this year.

But the minutes also noted that recent global economic and financial developments may have increased the downside risks to the U.S. economy.

The minutes reinforced expectations that U.S. interest rates will remain on hold until well into 2016 after a weak U.S. jobs report at the start of the month prompted investors to push back expectations on the timing of an initial rate hike.

EUR/USD was steady at 1.1360, holding just below Friday’s three-week peaks of 1.1386, while USD/JPY was little changed at 120.15.

Growth linked currencies remained higher on prospects for a delay in Fed liftoff, with the Australian dollar rising to fresh seven week highs of 0.7352 overnight.

The New Zealand dollar was at 10-week highs, with NZD/USD last at 0.6711.

Investors were looking to U.S. economic reports on retail sales and inflation later in the week for further indications on the possible direction of monetary policy.

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