Dollar broadly lower in subdued trade

Shutterstock photo - The U.S. dollar was broadly lower against the other major currencies in quiet trade on Monday amid caution over the outlook for U.S. budget negotiations, while investors looked ahead to central bank meetings later in the week.

During U.S. morning trade, the greenback turned lower against the euro, with EUR/USD rising 0.23% to 1.3098.

Sentiment on the euro remained fragile amid speculation that the European Central Bank could hint at rate cuts at Thursday's policy meeting.

The greenback remained somewhat supported after last week's minutes from the Federal Reserve's December meeting showed that some policymakers considered an earlier-than-expected end to the bank's quantitative easing program.

However official data on Friday showed the U.S. economy added 155,000 jobs in December, easing from an upwardly revised increase of 161,000 in November, fanning concerns that the pace of the recovery in the U.S. labor market is moderating.

Meanwhile, relief over an agreement to avoid the U.S. fiscal cliff was offset by concerns about continuing political wrangling over further budget cuts and raising the U.S. debt ceiling.

Elsewhere, the dollar pulled back from two-and-a-half-year highs against the yen, with USD/JPY down 0.47% to 87.72 as traders locked in profits after the dollar's recent sharp gains.

The greenback edged lower against the pound, with GBP/USD inching up 0.09% to 1.6083.

The greenback was lower against the Swiss franc, with USD/CHF down 0.23% to 0.9224.

Earlier Monday, a report by the Swiss National Bank showed that foreign currency reserves declined to CHF427.17 billion in December from CHF427.37 billion the previous month, down for the third successive month.

The greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.15% to 0.9858, AUD/USD dipping 0.02% to 1.0478 and NZD/USD up 0.34% to 0.8344.

The Canadian dollar found support after the Ivey PMI improved to 52.8 in December from 47.5 in November, compared to expectations for a reading of 50.0.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.25% to 80.40.

Earlier Monday, official data showed that producer price inflation in the euro zone declined 0.2% in November, defying expectations for a 0.1% increase.

A separate report showed that the Sentix index of investor confidence in the euro zone came in at minus seven in January, its highest level since February 2011, after a reading of minus 16.8 last month. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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