Sterling weakens versus US dollar, euro

Story link: Sterling weakens versus US dollar, euro

Declining oil prices and a slight easing of the North Korean situation helped the US dollar strengthen on Monday, but investors seemed unwilling to make large commitments before the scheduled meeting of the US Federal Reserve later in the week. Most analysts expect that the Fed will once again leave interest rates on hold, but many investors are looking forward to the statement accompanying the rates decision to try to figure out just when rates might rise - or fall - again.

The greenback added 0.5 percent versus both the euro and the yen, to $1.2550 and ¥119.26 respectively, while it gained 0.7 percent in relation to the Swiss franc, to SFr1.2675.

Sterling, meanwhile, was weaker, dropping 0.2 percent against the euro, to £0.6708, and falling 0.7 percent versus the US dollar to $1.8706. While analysts expect the Bank of England to raise interest rates again in November, there is some anticipation that it will be the last hike in the series before rates begin to fall sometime next year.

The Australian dollar held steady against the US dollar at $0.7585 and added 0.4 percent versus the yen to ¥90.40 on producer price data that was stronger than had been anticipated, raising expectations that the Reserve Bank of Australia will raise interest rates soon. The Saudi Arabian riyal was also up in relation to the US currency, to SR3.7420, on expeditions that the kingdom will revalue its currency after the end of Ramadan. Meanwhile, the South African rand was 1.8 percent lower against the greenback to $7.6630 after the governor of the South African Reserve Bank warned on inflation.