Forex- Dollar Continues to Fall Amid Thin Trading

© Reuters. The U.S. dollar continues to fall. – The dollar continued to fall against a currency basket on Monday amid speculation that the European Central Bank is preparing to scale back its massive stimulus program, as trading remained thin on a U.S. holiday.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.51% to 90.16 by 12:20 PM ET (17:20 GMT), a level not seen since December 2014.

Trade volumes are expected to remain light on Monday as U.S. markets are closed for the Martin Luther King Day holiday.

The euro hit fresh three-year highs against the dollar, building on last week’s strong surge, with rising 0.61% to 1.2271.

The euro was bolstered by investor speculation that ECB policy makers are preparing to wind down their bond buying stimulus program.

A faster rate of monetary tightening outside the U.S. would lessen the divergence between the Federal Reserve and other central banks, weighing on the dollar.

Against the yen, the dollar fell to its lowest levels since mid-September, with falling 0.48% to 110.53.

The yen was boosted by on Monday highlighting the country’s economic recovery.

Sterling also pushed higher against the dollar, with rising 0.59% to 1.3807, the most since Britain’s vote to exit the European Union in June 2016.

The pound rallied on Friday following a report that the Netherlands and Spain are open to a deal for Britain to remain as close as possible to the EU after Brexit.

The pound shrugged off a subsequent denial of the report from officials from the Spanish and Dutch finance ministries.

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