Investing.com - The dollar regained ground against the other major currencies on Monday but remained below recent multi-month highs as the gap tightened between the U.S. presidential candidates ahead of next week’s election.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.27% to 98.58, still shy of the almost nine-month high of 99.09 set last Tuesday.
The index has rallied 3.34% so far this month, putting it on track for its largest monthly gain in just under a year.
The dollar weakened late Friday after the FBI said it would review more emails related to Hillary Clinton's private email use while she was secretary of state.
The report sparked fresh uncertainty over Mrs. Clinton’s election prospects ahead of the November 8 vote, amid fears over the implications of a victory for Republican candidate Donald Trump.
The dollar had been boosted earlier Friday after a stronger-than-forecast estimate of U.S. third quarter growth supported the case for the Federal Reserve to hike interest rates in December.
The U.S. central bank raised rates for the first time in almost a decade in December.
The Fed’s next meeting is on Wednesday, but a rate hike ahead of the presidential election is seen as unlikely.
Expectations for higher rates typically boost the dollar by making it more attractive to yield seeking investors.
Investors currently price a 68% chance of a rate hike at the Fed's December meeting; according to federal funds futures tracked Investing.com's Fed Rate Monitor Tool.
The euro was lower, with EUR/USD down 0.34% at 1.0949 after data showing that the pace of economic growth in the euro zone was unchanged in the third quarter from the second, while the rate of inflation picked up only slightly in October.
A separate report showed that German retail sales fell at the fastest rate in two years in September, adding to concerns over the outlook for the euro area’s largest economy.
USD/JPY was up 0.32% to 105.05, re-approaching Friday’s three-month highs of 105.52.
Meanwhile, sterling was lower as speculation over whether Bank of England Governor Mark Carney will serve out his full term continued.
GBP/USD popped up to highs of 1.2215 overnight following a report that Carney will remain on in the governorship until 2021, before falling back to 1.2164.
Carney has faced criticism following his pre-referendum warnings that a Brexit vote could push the U.K. economy into an immediate recession.