US dollar weakens ahead of rate decisions this week

Story link: US dollar weakens ahead of rate decisions this week

The US dollar was lower on Monday ahead of interest rate decisions in the US on Wednesday and in the UK and Eurozone on Thursday. The Federal Reserve in the US and the European Central Bank are both expected to hold interest rates steady this week, although many analysts expect a Eurozone rate hike in June. Meanwhile, the Bank of England is widely believed to be ready to issue a rate hike on Thursday. In addition to the upcoming rate news, the euro got a bit of help from the election this weekend of Nicolas Sarkozy as president in France. He is seen as friendly to the markets.

The euro had added 0.2 percent versus the greenback, to $1.3618 by late morning in New York, while sterling was just less than 0.2 percent higher than the dollar on relatively light trade with London markets closed for a Bank Holiday. The Japanese yen, meanwhile, gained a bit more than 0.2 percent on the US currency, to ¥119.90. The Canadian dollar was also stronger in relation to its US counterpart, adding 0.5 percent to $1.1027, bringing its gain versus the greenback to around 7 percent in three months.