The dollar dips amid expectations of low interest rates
The U.S. dollar plumbed a six-year low against the Canadian dollar. It wobbled close to multi-month lows against European currencies amid renewed expectations that the U.S. will not hike interest rates anytime soon.
On Monday, Dallas Federal Reserve President Robert Kaplan reiterated his view that he does not anticipate interest rates to increase until 2022. Notably, that is fuelling a further slump in bets that inflationary pressure could force the Fed to act sooner.
This week a host of Fed policymakers are set to speak. The U.S. central bank will also release minutes from its last meeting. Remarkably, it may give hints about where monetary policy is headed this year.
Still, the growing consensus is that the Fed will tolerate what it sees as a temporary acceleration in inflation, which will keep the greenback lower versus most major currencies.
The greenback traded at $1.2167 against the euro, close to the weakest since February 26.
The British sterling increased to $1.4174 to reach its strongest since late February. The pound has been buoyed as investors cheer the gradual lifting of strict COVID-19 restrictions.
The Canadian dollar surged to a six-year high against the dollar
Meanwhile, the Canadian dollar surged to a six-year high of C$1.2045 versus the dollar, aided by a surge in oil prices. The American currency held steady at 109.16 yen.
The yen declined against the British sterling and the Antipodean currencies after data revealed Japan’s economy weakened more than expected due to COVID-19 infections.
The onshore yuan gained to 6.4332 per dollar, close to an almost three-year peak hit last week.
The risk-sensitive currencies, the Australian and New Zealand dollars, also increased against their U.S. counterpart.
Meanwhile, the largest cryptocurrency in the world, Bitcoin, gained 2.91% to $44,860. However, the cryptocurrency was traded close to a three-month low amid doubts about Tesla’s CEO Elon Musk’s enthusiasm for the digital asset.
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