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Markets

Dollar lower against yen, pound touches 5-year highs

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Investing.com -

Investing.com - The dollar slid lower against the yen on Monday as concerns over the conflict in Iraq underpinned safe haven demand, while the pound briefly rose to its highest level in five years against the dollar amid growing expectations for a U.K. hike.

USD/JPY slipped 0.11% to 101.78 from 102.03 late Friday.

Concerns over the ongoing Sunni insurgency in Iraq continued to weigh on market sentiment on Monday, amid fears over the impact of reduced oil supply from one of the world's largest producers on global growth.

Investors were also cautious ahead of the outcome of the upcoming Federal Reserve policy meeting on Wednesday, as they await fresh indications on the timing of possible interest rate increases.

Elsewhere, GBP/USD rose to session highs of 1.7011, the highest since August 6, 2009, before pulling back to 1.6967.

Sterling continued to remain supported after Bank of England Governor Mark Carney said late last week that U.K. interest rates could rise sooner than expected as the economic recovery continues to gain momentum.

EUR/USD was down 0.08% to 1.3529, not far from the four month trough of 1.3502 struck earlier this month after data on Monday confirmed that the annual rate of inflation in the euro zone remained unchanged at a four-and-a-half year low of 0.5% in May.

The European Central Bank targets an annual inflation rate of close to but just under 2%.

Earlier this month the ECB cut rates to record lows and imposed negative rates on commercial lenders for the first time, in order to combat the threat of persistently low inflation in the euro area.

The dollar was steady against the Swiss franc, with USD/CHF at 0.8999.

NZD/USD edged up 0.09% to 0.8672, while AUD/USD slipped 0.18% to 0.9384 and USD/CAD was at 1.0866.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was steady at 80.74.

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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.

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