Forex – Dollar Flat as Slump in Sterling Limits Downside

© Reuters. – The U.S dollar was flat against its rivals Monday as a wobble in sterling helped offset losses and data showing the U.S. housing market continued to stutter.

The , which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.02% to 96.03.

The showed a reading of 62 for March, unchanged last month. That missed economists’ estimates for a reading of 63, but the report noted that “builders report the market is stabilizing following the slowdown at the end of 2018 and they anticipate a solid spring home buying season.”

The data comes ahead of the Federal Reserve Open Market Committee’s two-day meeting that begins Tuesday. The central bank is expected Wednesday to stand pat on interest rates and reiterate the need to be patient on monetary policy tightening.

“The dollar retreated last week from 2019 highs and faces another potentially testing week if on Wednesday the Fed sends a dovish message by lowering the dot plot,” said Societe Generale (PA:). The dot plot shows the projections of where each Fed governor expects interest rates to be at certain points in the future.

The dollar was also supported by a slip in sterling after U.K. Speaker John Berkow reportedly ruled against U.K. Prime Minister Theresa May’s plan to have a third vote on her withdrawal deal after she failed to get support of DUP, the party that props up her government. Berkow said the deal must be substantially changed before there’s another vote.

slid 0.44% to $1.3231.

Without support for her deal, May is expected to ask EU lawmakers permission for an extension to Brexit beyond the March 29 deadline. EU lawmakers are set to gather on March 21-22, to vote on whether to grant the U.K. an extension. In the unlikely scenario that the EU votes against an extension, the U.K. risks crashing out of the EU without a deal.

rose 0.09% to $1.1335, while rose 0.09% C$1.3341, with the latter pair under pressure as rising oil prices supported the loonie.

pared gains to Y111.33, down from session highs of Y111.64 as sentiment on risk turned lower during the U.S. session, boosting the safe-haven yen.

fell 0.65% to 19.11 as Goldman Sachs said the currency pair’s status as a global risk-off hedge has “deteriorated significantly,” probably reflecting the elevated risk premium still embedded in the Mexican peso.

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