Against its Japanese counterpart, the greenback edged down 0.1 percent to 114.67, shy of last week's high of 115.51, which was its highest level since Jan.
Against its Japanese counterpart, the greenback edged down 0.1 percent to 114.67, shy of last week’s high of 115.51, which was its highest level since Jan. 19 as expectations built for the rate increase. “I think the dollar might have trouble above the 115 level today, with Japanese exporters still seeking to sell above it ahead of the end of the Japanese fiscal year this month,” said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo. “Of course, everyone is waiting for the Fed, so we’re expecting range-bound trading until we get some clear signals about expectations for the rest of the year,” he said.
US inflation data overnight cemented rate hike expectations. US producer prices rose more than expected last month, marking the most robust year-on-year gain in nearly five years.
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Sterling nursed its losses after tumbling to an eight-week low of $1.2110 in the previous session, amid worries about a prolonged and painful process of the UK’s exit from the European Union.
British Prime Minister Theresa May won parliamentary backing on Monday to begin the process of leaving the EU and start two years of talks that will shape the future of Britain and Europe, as Scotland mulled a possible second independence referendum.
The euro edged up 0.1 percent to $1.0613 but remained shy of its Monday high of $1.0714, its loftiest peak since early February, as concerns about a Dutch vote offset market speculation that the European Central Bank could be poised to wind down its stimulus programme.
The Netherlands will vote on Wednesday in an election that was seen as a test of anti-immigrant sentiment even before a rift with Turkey at the weekend put immigration and nationalism at the top of the political agenda.