Investing.com - The dollar pushed higher against the euro on Monday and eased against the yen as investors positioned ahead of meeting of the Federal Reserve and the Bank of Japan a little later in the week.
EUR/USD was down 0.35% at 1.1108, extending its pullback from the one-month high of 1.1217 struck last Thursday after the European Central Bank deployed stronger than expected stimulus measures but indicated that further rate cuts may not be forthcoming.
USD/JPY dipped to lows of 113.51 and was last at 113.71.
Investors were turning their attention to the outcome of Japanese and U.S. central bank policy meetings.
The Fed was not widely expected to raise interest rates at the conclusion of its meeting on Wednesday, given recent signs of weakness in the global economy
But the U.S. central bank was likely to signal that rates will rise fairly soon as long as U.S. inflation and jobs continue to strengthen.
Most economists are now expecting the first rate hike of this year in June.
The Fed hiked rates in December for the first time since 2006 and projected four rate increases during 2016.
Fed Chair Janet Yellen’s post policy meeting news conference will be closely watched for clues about interest rates’ future path.
The Bank of Japan was also expected to keep monetary policy unchanged when its meeting ends on Tuesday after its shock decision to adopt negative interest rates in January, which did little to weaken the yen.
The yen has risen to its highest level against the U.S. dollar in more than a year amid the global market turmoil since the start of 2016.
A weaker currency has been a key element of Japanese Prime Minister Shinzo Abe’s economic program, known as Abenomics, helping to boost exports.
The growing view that the BoJ’s loose monetary policy measures are losing their effectiveness has also contributed to the yen’s strength.
The dollar was higher against the pound and the Swiss franc, with GBP/USD down 0.44% at 1.4319 and USD/CHF advancing 0.41% to 0.9866.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.4% at 96.61.