• The euro rose against the U.S. dollar on Monday, just shy of the three-year high touched last week, as market participants awaited the outcome of the European Central Bank’s meeting on Thursday for possible clues to future shifts in the bank’s monetary policy.
The euro was up 0.3 percent against the greenback at $1.2257, with traders focused on upcoming central bank meetings.
• The dollar index, which measures the greenback against six rival currencies, was down 0.2 percent at 90.388, close to a three-year low.
News of U.S. senators striking a deal to lift a three-day government shutdown failed to give a lasting boost to the weak dollar.
• The U.S. Senate on Monday approved by an 81-to-18 vote a measure to fund the federal government through Feb. 8, sending the bill to the House of Representatives.
• The ECB is unlikely to ditch a pledge to keep buying bonds as rate setters need more time to assess the outlook for the economy and the euro, three sources close to the matter have said.
• Investors also await a Bank of Japan policy announcement on Tuesday. Analysts do not expect Japan to signal any policy shift.
The idea of other major central banks moving closer to more normal policies has been a key headwind for the dollar over the last year.
• Japan’s central bank is set to keep monetary settings unchanged on Tuesday and offer a cautiously optimistic view on the inflation outlook, nodding to expectations that a strengthening recovery and a tightening job market may prompt firms to lift wages.
• Oil settled higher on Monday after dollar fluctuations and the restart of some Libyan oil fields caused the market to vacillate, with prices testing lower before rallying to levels just below three-year highs.
Brent crude futures for March delivery settled up 42 cents, or 0.6 percent, at $69.03 a barrel, after earlier rallying to $69.51. Brent on Jan. 15 had hit $70.37, the highest since December 2014.
U.S. crude rose 25 cents, or 0.4 percent, to close at $63.62 a barrel.
Reference: Reuters
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