The U.S. dollar weakened against the other major currencies in the Asian session on Monday, as traders remain cautious ahead of the U.S. Federal Reserve’s monetary policy meeting later this week.
The Federal Reserve’s two-day monetary policy meeting decision is due this Thursday. Analysts are still split regarding whether the Federal Reserve will raise rates then, or opt for December or early next year. While upbeat economic data points to the first rate hike in nearly a decade, the recent market volatility and concerns about developing economies may keep the Fed on hold.
Soft Chinese economic data released over the weekend highlighted the fragility of the Chinese economy. Industrial output growth trailed analyst estimates and fixed-asset investment rose at the slowest pace in 15 years, while retail sales climbed 10.8 percent in August, beating forecasts.
Last Friday, the U.S. dollar showed mixed performance against its major rivals. While the U.S. dollar fell against the euro and the Swiss franc, it held steady against the pound and the yen.
In the Asian trading, the U.S. dollar fell to nearly a 3-week low of 1.1359 against the euro and nearly a 2-week low of 0.9679 against the Swiss franc, from last week’s closing quotes of 1.1336 and 0.9691, respectively. If the greenback extends its downtrend, it is likely to find support around 1.17 against the euro and 0.94 against the franc.
The greenback dropped to a 4-day low of 120.27 against the yen, from Friday’s closing value of 120.57. On the downside, 118.00 is seen as the next support level for the greenback.
Against the pound, the greenback edged down to 1.5459 from Friday’s closing value of 1.5427. The greenback may test support near the 1.58 area.
Looking ahead, Swiss producer and import prices for August and retail sales data for July and Eurozone industrial production for July are due to be released in the European session.
At 3:00 am ET, European Central Bank Governing Council member Christian Noyer is scheduled to deliver the opening speech at a conference to mark the 20th birthday of Bank of France Foundation in Paris.
The material has been provided by InstaForex Company – www.instaforex.com