US Dollar Lower on Monday Ahead of Central Bank Announcements

The US dollar is lower against most major pairs on Monday. The week will feature a host of central bank policy announcement that kick off with the Bank of Japan (BOJ) on Monday night. The Fed is not expected to tweak monetary policy on Wednesday, but the statement could end up being positive for the USD. The Bank of England (BoE) is heavily anticipated to hike by 25 basis points, but uncertainty about Brexit could make the central bank hesitate on pulling the trigger as a No Deal exit from the EU is gaining as a likely outcome. Jobs data is also scheduled to be released at the end of the week with all signs pointing to another strong U.S. non farm payrolls (NFP) report, higher wages and a lower unemployment rate in America.

The Japanese yen is trading lower ahead of the central bank announcement. The BOJ was not firmly on the market’s radar until it recently stepped up its rate of interventions in the fixed income market and hinted at a clear yield curve control policy. The possibility of a lower inflation forecast to a more reasonable 1 percent level could also be part of the central bank’s announcement.

The British pound is higher ahead of the Bank of England (BoE) rate announcement on Thursday. The central bank is expected to make Super Thursday a little bit more super with a 25 basis points rate hike.

Brexit uncertainty is keeping the pound under pressure, but the US dollar fall has allowed the GBP to move into positive territory. The Fed is not expected to announce a change in monetary policy, although a hawkish statement could support the USD on Wednesday.

The Canadian dollar appreciated versus the US on Monday. Oil prices are above $70 combined with the softness of the US dollar and NAFTA optimism have taken the loonie higher at the start of the week.

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