The US dollar was little changed against other major currencies on Monday, standing close to a 3-week high as anticipations for a Fed interest rate hike in June continued to bolster the demand for the US currency.
USD/JPY plunged by 0.57 percent to 109.50, pulling away from the 3-and-1/2-week high of 110.58 reached on Friday.
The Japanese yen was pushed higher after Monday’s data showed that the April trade surplus in Japan came in at ¥823.5 billion. This figure was way above estimates of ¥493 billion. Moreover, a separate report indicated that Japanese factory activity shrank at the fastest pace in more than 3 years in the month of May as new orders slumped.
The weak data added to pressure on the Bank of Japan to boost measures to stimulate growth.
Meanwhile, the greenback stayed supported after the US central bank’s April meeting minutes stated that interest rates could increase as soon as June.
Additionally, the New York Federal Reserve President Mr. William Dudley announced last Thursday that the domestic economy could be strong enough for an interest rate hike in the month of June or July.
Elsewhere, the EUR/USD pair dipped by 0.13 percent to reach 1.1209, going back to the 2-and-1/2- month trough of 1.1177 touched last week. On the other hand, the USD was weaker against the pound, with the GBP/USD pair higher by 0.09 percent at 1.4526.
The US dollar index, which measures the strength of the greenback against a basket of 6 major currencies, was steady at 95.29. This figure is still close to the 3-week highs of 95.51 reached last Friday.
Get access to accurate forex forecasts from FSM News. Receive regular updates by subscribing to our daily newsletter.