Forex – Weaker Dollar Hits Fresh 3-Month Lows

© Reuters. Weaker dollar hits fresh 3-month lows – The broadly weaker dollar fell to fresh three month lows against a basket of the other major currencies on Tuesday in the first trading day of 2018, while the euro was in striking distance of its 2017 peak against the dollar.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.26% to 91.75 by 03:08 AM ET (08:08 AM GMT), the weakest level since September 22.

The index ended 2017 down 9.8%, the biggest annual percentage decline since 2003.

The dollar weakened in 2017 as the global economy gained momentum fueling expectations for tighter monetary policy in other countries, which would lessen the divergence between the Federal Reserve and other central banks.

Market watchers were looking ahead to Wednesday’s minutes of the Fed’s December meeting for further hints on the future path of monetary policy.

Investors were also awaiting Friday’s U.S. nonfarm payrolls report for December.

The euro pushed higher, with rising 0.25% to 1.2036, the highest level since September 8, not far from the two-and-a-half year peak of 1.2091 set that day.

The euro advanced 14% against the dollar in 2017, its largest annual percentage gain since 2003.

The euro was near two-year highs against the yen, with up 0.22% to 135.59, the most since February 2016.

The dollar was little changed against the yen, with at 112.63, not far from Friday’s more than one-week low of 112.46.

Meanwhile, sterling was near three-week highs against the dollar, with rising 0.26% to 1.3538 ahead of a report on UK manufacturing activity later in the day.

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