Investing.com - The dollar traded higher against most major
currencies on Monday mainly on safe-haven demand as investors
priced in the possibility of a European Central Bank rate cut in
June, though escalating Ukraine tensions and demand for the euro
among bargain hunters steadied the greenback.
In U.S. trading on Monday, EUR/USD was flat at 1.3758.
Last week, the European Central Bank left interest rates
unchanged at 0.25%, though the euro dropped after ECB President
Mario Draghi said the bank's governing council would feel
comfortable with acting at its next meeting after the bank
publishes fresh inflation and growth forecasts.
The euro dropped on Draghi's comments though the currency found
support on Monday, posting cautious gains against the dollar
On Monday, ECB Vice President Vitor Constancio said medium-term
inflation outlook will take center stage when monetary authorities
consider implementing fresh policy measures.
He said the ECB was considering a wide range of policy options
but stopped short of indicating what the bank may decide.
He stressed the ECB won't ignore the euro's strength but added
that the exchange rate is not a policy target.
Elsewhere Monday, International Monetary Fund head Christine
Lagarde renewed calls for more stimulus from the ECB, warning that
persistently low inflation rates posed a serious threat to the
Geopolitical concerns capped the greenback's advance due to
fears U.S. recovery could hit a pothole if the crisis in Ukraine
develops further, as many U.S. businesses are heavily exposed to
Pro-Russian separatists claimed victory in a weekend referendum
on self rule in the eastern Ukrainian city of Donetsk, which
stirred concerns that the country is sliding closer to civil
The vote has been condemned by Ukraine's government and the
West, which has threatened to hit Russia with fresh sanctions.
The dollar was up against the yen, with USD/JPY up 0.30% at
102.16 and up against the Swiss franc, with USD/CHF up 0.19% at
The greenback was down against the pound, with GBP/USD up 0.10%
The dollar was mixed against its cousins in Canada, Australia
and New Zealand, with USD/CAD down 0.02% at 1.0900, AUD/USD down
0.02% at 0.9362 and NZD/USD up 0.06% at 0.8618.
The US Dollar Index, which tracks the performance of the
greenback versus a basket of six other major currencies, was up
0.05% at 79.96.
On Tuesday, the U.S. is to produce data on retail sales, as well
as reports on import prices and business inventories.
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