Forex – Dollar Down As Senate Aims For Vote On Three-Week Funding Plan Later Today

© Reuters. Dollar weaker in Asia – The dollar fell in Asia on Monday as the Senate moved to schedule a vote at noon on the day to fund the government for three weeks as it moves to pass complex legislation on immigration that has caused sharp rifts.

changed hands at 110.78, up 0.07%%, while traded at 0.7989, down 0.11%. The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.09% to 90.41.

The US government shutdown on Saturday extends into the new week with all but essential services curbed and many of the regularly schedule data releases possibly delayed if the failure to provide stopgap funding continues.

The Bank of Japan starts a two-day monetary policy meeting with the decision on Tuesday expected to be closely watched for any signs the aggressive easing stance could be dialed back this year. A tweak by the Bank of Japan to its bond buying program earlier this month sparked speculation about a pullback in its monetary stimulus scheme later this year.

Investors will be focused on the outcome of monetary policy meetings by the ECB and fourth quarter growth from both the U.S., if it is released during the shutdown, and the UK. Canadian inflation data will also be in focus after last week’s rate hike by the country’s central bank.

The World Economic Forum in Davos and talks on the North American Free Trade Agreement will also be closely watched for developments.

Last week, the dollar edged higher late Friday but ended the week near a three-year low against a basket of the other major currencies as fears over the prospect of a U.S. government shutdown weighed.

The dollar pushed higher amid hopes that a meeting between President Donald Trump and Senate Democratic leader Chuck Schumer would yield a last minute solution to avoid a shutdown.

The dollar has been pressured lower by the view that the global economic recovery will outpace U.S. growth and prompt other major central banks, including the European Central Bank to begin unwinding loose monetary policy at a faster pace.

Meanwhile, sterling slid against the dollar on Friday as weak UK retail sales figures clouded the outlook for the economy.

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