Investing.com – The dollar was softer against a basket of the other major currencies on Monday as doubts over whether the Federal Reserve will raise interest rates again later this year continued to weigh.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.07% to 96.91, adding to Friday’s losses when it fell 0.37%.
Recent data pointing to a slowdown in inflation has raised questions over the Fed’s plans to tighten monetary policy.
At its latest meeting earlier this month the Fed stuck to its projection for one more rate hike this year despite the subdued inflation outlook, but investors think the pace of its tightening will be much slower than policymakers want.
St. Louis Federal Reserve President James Bullard said Friday that the Fed should hold off on any further rate increases to see how the economy is progressing.
This was echoed by San Francisco Fed President John Williams who said the Fed needs to keep raising rates gradually with the U.S. economy at full employment and inflation set to hit the Fed’s 2% target next year.
The dollar edged higher against the yen, with USD/JPY rising 0.14% to 111.44.
The euro was a touch higher, with EUR/USD at 1.1201, not far from Friday’s four day high of 1.1208.
Sterling gained ground against the greenback, with GBP/USD climbing 0.23% to 1.2747 amid growing expectation for a rate hike by the Bank of England in the coming months.
The Australian dollar was also higher, with AUD/USD up 0.28% to 0.7588 as a recovery in oil prices boosted the commodity linked currency.
Meanwhile, the Canadian dollar was also higher, with USD/CAD down 0.18% to 1.3243.