The Euro traded in the green for the last three consecutive days. On Monday, it stood at $1.18455. The ECB showed no apparent sign of stemming the Euro’s appreciation. As a result, the currency gained more footing on the market over the last days.
Meanwhile, the dollar’s index against a basket of currencies changed slightly at 93.317. Traders were mostly focused on the Federal Reserve’s policy announcement on Wednesday.
Thus far, the dollar index has lost more than 4% this quarter. Traders’ expectations of further monetary easing by the Fed have been a drag on the greenback. But some experts say markets may have gone too far in waiting for further stimulus from the Fed.
On the other hand, the Sterling traded at $1.2806 after plunging to $1.2767 on Friday. The British currency was perilously near to a 1-1/2-month low against the greenback. Traders fear that there will be no-deal Brexit, causing the pound’s decline. Against the Euro, it dropped to 5 1/2-month low of 92.54 pence per Euro, the last trading at 92.47.
London acknowledged last week that it might break international law by ignoring some parts of its European Union divorce treaty. As a result, the Sterling was under pressure from worries that Britain will truly end its post-Brexit transition period without agreeing to any trading arrangements.
How did the U.S. dollar and the Japanese Yen fare?
The dollar traded at 106.13 yen on Monday. Meanwhile, the Yen remained relatively steady after it became known that Japanese Chief Cabinet Secretary Yoshihide Suga will be head of Japan’s ruling party, succeeding Shinzo Abe.
Traders don’t expect radical changes as Suga has been a loyal aide to Abe for a long time, and he vowed to continue Abe’s policies. According to Minori Uchida, the chief FX strategist at MUFG Bank, the focus is on the line-up of Suga’s cabinet. Investors contemplate whether he will call a snap election. Even though Suga claims that he will continue and advance Abenomics, it is questionable how much advancement he can make.