Investing.com - The dollar edged lower against the other major currencies on Monday, but remained supported above recent lows as markets turned their focus to a number of upcoming central bank meetings later in the week.
The drop in the dollar came as oil prices resumed their decline on Monday amid ongoing concerns over a global supply glut and slowing global demand.
The drop in oil prices hit market sentiment, sending European stock lower and bolstering demand for safe haven assets.
USD/JPY slid 0.37% to 118.33, off Friday’s two-week highs of 118.87, but still well above the one-year trough hit last Wednesday.
The Federal Reserve is expected to keep interest rates on hold at the conclusion of its latest meeting on Wednesday after hiking rates for the first time in almost a decade in December.
Investors are looking to the Fed policy statement for any indication that the bank is considering slowing the path of interest rate increases this year after recent global financial market turmoil.
The yen had weakened against the dollar on Friday after Bank of Japan Governor Haruhiko Kuroda the central bank has room to provide additional stimulus if necessary.
The BoJ is to conclude its two day policy meeting on Friday and most analysts are expecting no changes to monetary policy, but recent weakness in economic reports has fueled expectations for more easing later this year.
Data on Monday showed that Japanese exports fell 8% in December from a year earlier. It was the third successive monthly decline as the slowdown in China weighed.
The dollar was also lower against the Swiss franc, with USD/CHF down 0.28% to 1.0131.
The low-yielding euro moved higher against the dollar, with EUR/USD rising 0.32% to 1.0830, moving back from the two-week lows of 1.0776 hit on Thursday.
The single currency weakened across the board after European Central Bank President Mario Draghi indicated Thursday that the bank could roll out fresh stimulus measures as soon as its next meeting in March.
In the euro zone, data on Monday showed that German business climate weakened slightly this month.
The Ifo German business climate index ticked down to 107.3 from December’s 108.6, compared to expectations for a reading of 108.4.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.19% to 99.41, remaining supported below Thursday’s more than one-month highs of 99.79.