Investing.com – The dollar remained weaker against a basket of the other major currencies on Monday amid renewed concerns over the U.S. government’s protectionist stance, while sterling slid following news that Brexit will be triggered next week.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 100.09 by 12.00 ET, after falling to lows of 99.86 earlier, the weakest level since February 6.
The dollar remained under pressure after G20 financial leaders dropped a pledge to keep global trade free and open from a policy statement at the weekend, following opposition from the increasingly protectionist Trump administration.
The move revived uncertainty about U.S. trade relations and by extension the U.S. administration’s concerns over the strong dollar.
The dollar was already on the back foot as expectations of a slower pace of U.S. interest rates hikes than some investors had anticipated weighed.
The Federal Reserve hiked rates last week, but stuck to its projection for two more hikes this year. Heading into the meeting, markets had braced for a potentially more hawkish tone from the U.S. central bank.
Investors were gearing up for a week in which no less than nine Fed officials were to speak, including Fed Chair Janet Yellen on Thursday.
Chicago Fed President Charles Evans said Monday the Fed is on track to raise rates twice more this year and could be more or less aggressive depending on fiscal policies and other effects on the economy.
The dollar was close to two-week lows against the yen, with USD/JPY slipping 0.11% to 112.57.
The euro was slightly higher, with EUR/USD up 0.12% to 1.0751, holding below Friday’s six-week high of 1.0781.
Investors continued to monitor political developments ahead of the upcoming French presidential elections after a poll showed far-right anti-EU leader Marine
Le Pen widening her lead over opponent Emmanuel Macron in the first round of France’s presidential elections due on April 23.
The poll also showed Macron beating her comfortably in the second-round run-off on May 7.
Meanwhile, sterling backed away from three-week highs, with GBP/USD last down 0.25% to 1.2366.
The drop in the pound came after confirmation that Article 50 will be triggered on March 29, getting the formal launch of the UK’s divorce proceedings from the European Union underway.
Sterling had risen earlier buoyed by hawkish remarks from the Bank of England last week and the prospects that Tuesday’s inflation report would show UK inflation rising above the BoE’s 2% target.
Sterling was also lower against the euro, with EUR/GBP advancing 0.37% to 0.8693.